Urriv.ofill.  Library 
51 


jFirst  Mortgage 


ARKANSAW  WATER  COMPANY 

TO 

CONTINENTAL  AND  COMMERCIAL  TRUST 
AND  SAVINGS  BANK 

AND 

FRANK  H.  JONES,  Trustees 


November  1 ,  1915 


The  Evening  Post  Job  Printing  Office,  Inc.,  156  Fulton  St.,  N.  Y. 
B36 


ilttbpttUttT,  bearing  date  the  first  day  of  November,  1915,  made 
and  entered  into  by  and  between  Arkansaw  Water  Company,  a  corpo¬ 
ration  of  the  State  of  Arkansas,  hereinafter  called  the  Company,  party 

* 

of  the  first  part,  and  Continental  and  Commercial  Trust  and  Savings 
Bank,  a  corporation  of  the  State  of  Illinois,  and  Frank  II.  Jones  of  Chi¬ 
cago,  Illinois,  as  Trustees,  hereinafter  called  respectively  the  Corporate 
Trustee,  and  the  Individual  Trustee  and  collectively  the  Trustees,  parties 
of  the  second  part : 

Whereas,  the  Company  has  deemed  it  necessary  to  borrow  money 
for  its  corporate  purposes  and  to  issue  its  bonds  therefor,  and  to  mort¬ 
gage  its  property,  hereinafter  described,  to  secure  the  payment  of  said 
bonds,  and  to  that  end  has  duly  authorized  and  directed  an  issue  of  its 
bonds,  issued  and  to  be  issued  as  hereinafter  set  forth,  to  be  designated 
as  its  First  Mortgage  Gold  Bonds,  such  bonds  to  be  coupon  bonds  in 
denominations  of  $100,  $500  and  $1,000  each  with  interest  coupons 
attached,  with  the  fac-simile  signature  of  the  present  Treasurer  of  the 
Company  thereon,  said  bonds  to  be  signed  in  its  corporate  name  by  its 
president  or  a  vice-president,  to  be  impressed  with  its  corporate  seal, 
attested  by  its  secretary  or  an  assistant  secretary,  and  to  be  authenticated 
by  the  Corporate  Trustee;  which  said  bonds,  coupons  and  Trustee’s 
certificates  of  authentication  are  to  he  substantially  in  the  forms  following 
respectively : 

[form  of  bond.] 

UNITED  STATES  OF  AMERICA, 

State  of  Arkansas. 

ARKANSAW  WATER  COMPANY. 

Little  Rock,  Arkansas. 

First  Mortgage  Gold  Bond. 

No .  Series .  $ . 

Arkansaw  Water  Company  (hereinafter  called  the  Company),  for 
value  received,  promises  to  pay  to  the  bearer,  or,  if  registered,  to  the 
registered  holder  hereof,  on  the  first  day  of  ,  at  the 


9 


office  or  agency  of  the  Company  in  the  City  of  Chicago,  Illinois,  or  at 
the  option  of  bearer  or  registered  holder  at  the  office  or  agency  of  the 
Company  in  the  City  of  New  York,  dollars  in  gold 

coin  of  the  United  States  of  America,  of  or  equal  to  the  present  standard 
of  weight  and  fineness,  and  to  pay  interest  thereon  from  , 

at  the  rate  of  per  centum  per  annum  in  like  gold  coin, 

payable  at  the  option  of  bearer  at  either  of  said  offices  or  agencies  on 
the  first  days  of  and  in  each  year  according  to 

the  tenor  of  the  respective  coupons  hereto  attached,  until  such  principal 
shall  be  paid.  Both  principal  and  interest  of  this  bond  are  payable 
without  deduction  for  any  taxes,  assessments  or  other  governmental 
charges  which  the  Company  may  be  required  to  pay  thereon,  or  author¬ 
ized  to  retain  therefrom  under  any  present  or  future  law  or  requirement 
of  the  United  States  of  America,  or  any  State,  count}7,  municipality  or 
other  governmental  subdivision  thereof,  except  so  far  as  the  Company 
cannot  lawfully  agree  to  pay  interest  hereon  without  such  deduction. 

This  bond  is  one  of  an  issue  of  bonds  of  the  Company,  known  as  its 
First  Mortgage  Gold  Bonds,  all  issued  and  to  be  issued  under  and  equally 
secured  by  a  Mortgage  and  Deed  of  Trust  (hereinafter  called  the  Mort¬ 
gage),  dated  November  1,  1915,  executed  by  the  Company  to  Continental 
and  Commercial  Trust  and  Savings  Bank  and  Frank  H.  Jones,  as  Trus¬ 
tees,  to  which  this  bond  is  subject  and  to  which  reference  is  made  for 
a  description  of  the  property  mortgaged  and  pledged,  the  nature  and 
extent  of  the  security,  the  rights  of  the  holders  of  the  bonds  and  the 
terms  and  conditions  upon  which  the  bonds  are  issued  and  secured.  As 
provided  in  the  Mortgage,  this  bond  is  subject  to  redemption  at  par  and 
accrued  interest  and  a  premium  of  per  centum  upon  the  principal, 
upon  four  weeks’  published  notice,  on  ,  or  on  any 

interest  date  prior  thereto,  or  upon  any  interest  date  subsequent  thereto, 
on  similar  notice,  at  par  and  accrued  interest  and  a  premium  of 
per  centum  upon  the  principal.  The  principal  hereof  may  also  become 
due  on  the  conditions,  in  the  manner  and  at  the  time  set  forth  in  the* 
Mortgage,  if  default  be  made  in  the  payment  of  interest  on  any  of  the 


3 


bonds  of  this  issue  or  in  tlie  performance  of  certain  covenants  of  the 
Mortgage. 

This  bond  may  be  registered  as  to  principal  in  the  owner’s  name 
upon  the  books  of  the  Company  at  its  office  or  agency,  in  the  City  of 
New  York  or  City  of  Chicago,  such  registration  being  noted  hereon,  after 
which  no  valid  transfer  hereof  can  be  made,  except  on  said  books,  until 
after  registered  transfer  to  bearer,  but  after  such  registered  transfer  to 
bearer,  this  bond  shall  be  again  transferable  by  delivery.  Such  registra¬ 
tion,  however,  shall  not  affect  the  negotiability  of  the  coupons  which  shall 
always  be  payable  to  bearer  and  transferable  by  delivery. 

No  recourse  shall  be  had  for  the  payment  of  the  principal  or  interest 
of  this  bond  against  any  stockholder,  officer  or  director  of  the  Company, 
either  directly  or  through  the  Company  under  any  statute  or  by  the 
enforcement  of  any  assessment  or  otherwise,  all  such  liability  of  stock¬ 
holders,  directors  and  officers  being  released  by  the  holder  hereof  by  the 
acceptance  of  this  bond  and  being  likewise  waived  and  released  by  the 
terms  of  the  Mortgage. 

This  bond  shall  not  become  obligatory  until  Continental  and  Com¬ 
mercial  Trust  and  Savings  Bank,  one  of  the  Trustees  under  the  Mort¬ 
gage,  or  its  successors  thereunder,  shall  have  signed  the  form  of  certificate 

if 

endorsed  hereon. 

In  witness  whereof,  Arkansaw  Water  Company  lias  caused  this 
bond  to  be  signed  in  its  name  by  its  President  or  a  Vice-President  and 
its  corporate  seal  to  be  hereto  affixed  and  attested  by  its  Secretary  or 
an  Assistant  Secretary,  and  interest  coupons  bearing  the  fac-simile 
signature  of  its  Treasurer  to  be  attached  hereto,  this  first  day  of  Novem¬ 
ber,  1915. 

Arkansaw  Water  Company, 

By 


Attest : 


Secretary. 


President. 


4 


[form  of  coupon.] 

No .  | . 

On  the  first  day  of  ,  19  ,  Arkansaw  Water  Company 

will  pay  to  bearer,  at  bearer’s  option,  at  its  office  or  agency  either  in  the 
City  of  New  York  or  of  Chicago,  dollars  in  gold  coin, 

without  deduction  for  taxes,  as  specified  in  its  First  Mortgage  Gold  Bond 
No.  ,  being  six  months’  interest  then  due  on  said  bond. 

This  coupon  will  not  be  payable  if  said  bond  shall  have  been  called 
for  previous  redemption. 


•  •  *  * . ) 

Treasurer. 

[form  of  trustee’s  certificate  of  authentication.] 

This  is  to  certify  that  this  bond  is  one  of  the  bonds  described  in  the 
within  mentioned  mortgage. 


Continental  and  Commercial  Trust  and  Savings  Bank, 

Trustee, 


By 


And  whereas,  the  Board  of  Directors  of  the  Company  and  the 
stockholders  holding  all  its  outstanding  stock  have  regularly  authorized 
the  issue  of  said  bonds  and  the  making  of  this  Indenture  at  meetings 
thereof  respectively  duly  convened  and  held;  and 

Whereas,  all  other  things  necessary  to  make  the  said  bonds  when 
duly  certified  by  the  Trustee  valid,  binding  and  legal  obligations  of  the 
Company,  and  to  make  this  Indenture  a  valid,  binding  and  legal  instru¬ 
ment  for  the  security  thereof  have  been  done  and  performed  and  the  issue 
of  said  bonds,  as  in  this  Indenture  provided,  has  been  in  all  respects  duly 
authorized : 

Now,  therefore,  this  indenture  WITNESSETH:  That  Arkansaw 
Water  Company  in  consideration  of  the  premises  and  of  one  dollar  to  it 


5 


duly  paid  by  the  Trustee  at  or  before  the  ensealing  and  delivery  of  these 
presents,  the  receipt  whereof  is  hereby  acknowledged,  in  order  to  secure 
the  payment  both  of  the  principal  and  interest  of  the  bonds  aforesaid, 
according  to  their  tenor  and  effect,  hath  granted,  bargained,  sold,  released, 
conveyed,  assigned,  transferred,  pledged,  set  over  and  confirmed,  and  by 
these  presents  doth  grant,  bargain,  sell,  release,  convey,  assign,  transfer, 
pledge,  set  over  and  confirm  unto  Continental  and  Commercial  Trust  and 
Savings  Bank  and  Frank  H.  Jones,  as  Trustees  and  to  their  successors  in 
said  trust  and  to  their  assigns  forever,  all  the  following  described  prop¬ 
erties— that  is  to  say: 


I. 

All  and  singular  its  water  works  system  known  as  the  water  works 
of  the  Arkansaw  Water  Company,  situate  in  and  near  the  cities  of  Little 
Rock  and  Argenta  and  the  Town  of  Pulaski  Heights,  in  the  County  of  *> 
Pulaski,  State  of  Arkansas,  and  all  its  real  estate,  rights  and  interests  in 
lands  now  owned  or  hereafter  acquired  and  used  in  connection  with  said 
water  works  system,  together  with  all  buildings  and  machinery  thereon, 
and  all  its  pipes  and  mains,  rights,  privileges  and  franchises  now  held  or 
owned  or  hereafter  acquired  by  it,  and  any  and  all  other  property  and 
estate,  real,  personal  or  mixed,  now  held  or  owned  or  which  may  hereafter 
be  acquired  by  said  Arkansaw  Water  Company,  and  all  its  tolls,  rents, 
incomes  and  profits,  together  with  all  tenements,  hereditaments  and 
appurtenances  to  any  of  the  same  belonging,  and  also  all  deeds,  mortgages, 
leases,  contracts  and  all  muniments  of  title  to  any  and  all  of  said  real  and 
personal  property  and  estate. 

The  lands  at  present  hereby  conveyed  are  situate  in  the  County  of 
Pulaski,  State  of  Arkansas,  and  are  described  as  follows : — 

Parcel  One  :  All  right,  title  and  interest  of  the  party  of  the  first  part 
in  and  to  all  the  following  lands  lying  in  the  County  of  Pulaski  and  State 
of  Arkansas,  to-wit : — The  north  half  of  the  southeast  quarter  of  the  south¬ 
west  quarter:  and  the  southwest  quarter  of  the  southwest  quarter  of 


6 


Section  tliirty-three  (33)  :  and  the  southeast  quarter  of  the  southeast 
quarter  of  Section  thirty-two  (32),  all  in  Township  Two  (2),  North, 
Range  Twelve  (12)  AVest.  Being  the  same  that  was  sold  and  conveyed 
unto  the  Arkansaw  AVater  Company,  hereinafter  named,  by  Zeb  Ward, 
et  ux,  by  deed  bearing  date  February  26th,  1887  and  recorded  in  Record 
Book  19,  page  89,  and  Deed  dated  November  21st,  1889  and  recorded  in 
Deed  Record  28,  page  481,  in  the  office  of  the  Clerk  of  the  Circuit  Court 
and  Ex-Officio  Recorder  within  and  for  said  County. 

Parcel  Two  :  All  right,  title  and  interest  of  the  party  of  the  first 
part  in  and  to  all  the  east  fractional  part  of  the  northeast  quarter  of  the 
southwest  quarter  of  Section  Thirty-three  (33),  beginning  at  the  south¬ 
east  corner  of  said  tract  and  running  thence  west  three  and  50/100  chains, 
thence  north  four  chains,  thence  down  the  south  bank  of  the  Arkansas 
River  to  the  point  of  beginning,  in  Township  Two  (2)  North,  Range 
Twelve  (12)  West,  containing  70/100  acres.  Being  the  same  that  was 
sold  and  conveyed  unto  the  x\rkansaw  Water  Company,  hereinafter  named, 
by  Zeb  Ward  et  ux  by  Deed  bearing  date  November  21st,  1889  and  recorded 
in  Deed  Book  28,  page  482,  in  said  office. 

Parcel  Three  :  All  right,  title  and  interest  of  the  party  of  the  first 

part  in  and  to  all  the  following  piece  of  land,  described  as  follows : — 

Beginning  at  point  sixteen  and  ninety-four  hundredths  (16.94)  chains 

north  of  the  quarter  section  corner  on  south  side  section  thirty-three 

(33)  Township  Two  (2)  N.  Range  twelve  (12)  AVest,  and  run  north  two 

and  thirty  hundredths  (2.30)  chains  to  Arkansas  River,  thence  down 

south  bank  of  said  River,  to  point  immediately  east  of  beginning  point, 

and  thence  west  one  and  ninety-two  hundredths  (1.92)  chains  to  point  of 

beginning,  containing  twenty-two  hundredths  (0.22)  of  an  acre  more  or 

less.  Being  the  same  that  was  sold  and  conveyed  unto  the  Arkansaw 

AVater  Company,  hereinafter  named,  by  Zeb  Ward  et  ux,  by  deed  bearing- 

date  December  1.9th,  1893,  and  recorded  in  Deed  Book  42,  page  450,  in  the 

office  of  the  Clerk  of  Circuit  Court  and  Ex-Officio  Recorder  within  and  for 

said  Countv. 

«/ 


7 


Tlie  foregoing  tracts  of  real  estate  are  those  sold  and  conveyed  unto 
the  party  of  the  first  part  hereto  under  its  former  name  and  title  “Home 
Water  Company”  by  the  Arkansaw  Water  Company,  now  known  as  the 
City  of  Little  Rock  Water  Works  Company,  in  and  by  its  certain  deed 
dated  January  13th,  1902,  and  recorded  in  Deed  Record  No.  69,  page 
350,  in  the  office  of  the  Clerk  of  the  Circuit  Court  and  Ex-Officio  Recorder 
within  and  for  the  County  of  Pulaski,  in  the  State  of  Arkansas,  on  or 
about  the  24th  day  of  February,  1902. 

Parcel  Four:  One  hundred  and  twenty-five  feet  off  of  tlie  east  end 

/ 

of  lots  eleven  (11)  and  twelve  (12)  in  Block  two  hundred  and 
eighteen  in  the  City  of  Little  Rock,  being  the  property  sold  and  con¬ 
veyed  unto  the  party  of  the  first  part  hereto  by  W.  J.  Turner,  Agent, 
in  and  by  his  certain  deed  dated  January  6th,  1890,  and  recorded  in  the 
office  of  said  Clerk  in  Deed  Book  29,  page  275. 

Parcel  Five:  Lots  Ten  (10),  Eleven  (11)  and  Twelve  (12)  in  Block 
Five  (5)  in  East  Argenta,  Pulaski  County,  Arkansas,  being  the  prop¬ 
erty  sold  hnd  conveyed  unto  the  party  of  the  first  part  hereto  by  Rudolph 
Fink,  et  ux  in  and  by  their  certain  deed  dated  April  6th,  1894,  and 
recorded  in  said  office  in  Deed  Book  44,  page  259. 

Parcel  Six:  Lot  six  (6),  Block  Six  (6)  in  East  Argenta,  located 
on  part  of  south  1/2  S.  E.  1/4,  Section  35,  Township  2  North,  Range  12 
West,  being  the  property  sold  and  conveyed  unto  the  party  of  the  first 
part  hereto  by  Clay  E.  Smith  in  and  by  his  deed  dated  July  18th,  1906, 
and  recorded  in  said  office  in  Deed  Book  91,  page  214. 

Parcel  Seven  :  All  right,  title  and  interest  of  the  party  of  the  first 
part  hereto  in  and  to  a  tract  of  land  lying  in  the  S.  E.  corner  of  the 
S.  W.  1/4  and  in  the  S.  W.  cor.  of  the  S.  E.  1/4  of  Sec.  34,  T.  2  N.,  Range 
12  W ,,  containing  11/4  acres  more  or  less  and  described  more  fully  as 
follows:  Commencing  at  a  point  on  the  township  line  2370  feet  W.  of 
the  cor.  of  Secs.  34  and  35,  Twp.  2  N.,  R.  12  W.  (said  point  now  in 


8 


Arkansas  River)  thence  N.  13  deg.  34'  W.  180  feet,  thence  N.  61  deg.  19' 
West  483  feet,  thence  S.  45  deg.  56r  W.  145  feet  to  the  left  bank  of  the 
Arkansas  River,  thence  in  an  easterly  direction  along  the  left  bank  of 
the  Arkansas  River  to  the  point  of  beginning,  containing  11/4  acres 
more  or  less,  being  the  property  mentioned  or  described  in  a  certain 
deed  dated  October  25th,  1900,  and  recorded  in  said  office  in  Deed 
Record  63,  page  517. 

Parcel  Eight:  All  right,  title  and  interest  of  the  party  of  the  first 
part  in  and  to  that  part  of  lots  29,  30,  and  31  of  Worthens  Survey  of 
the  S.  E,  1/4  of  Section  33  T.  2  N.,  R.  12  W.  bounded  as  follows:  Begin¬ 
ning  5.05  chains  north  of  the  1/4  Section  corner  on  the  south  side  of 
said  Section  33  and  run  north  11.89  chains  to  iron  pin,  thence  East  2.50 
chains  to  iron  pin,  thence  along  the  Arkansas  River  bank  to  the  N.  E. 
corner  of  Lot  29,  thence  S.  6  1/2  deg.  W.  6.88  chains  to  S.  E.  corner  of 
tract,  thence  west  3.00  chains,  thence  N.  66  1/2  deg.  W.  3.25  chains, 
thence  N.  74  1/4  deg.  W.  6.00  chains  and  thence  N.  63  1/2  Degrees  W. 
4.60  chains  to  point  of  beginning,  containing  18.65  acres,  being  the  prop¬ 
erty  described  in  a  deed  by  Zeb  Ward  et  ux,  dated  February  5th,  1890, 
and  recorded  in  said  office  in  Record  Book  of  Deeds  29,  page  273,  and 
by  W  R.  Worthen  et  ux  by  their  certain  deed  dated  February  9th,  1892 
and  recorded  in  said  office  in  deed  record  36,  page  486. 

Excepting  therefrom  and  thereout,  nevertheless,  all  that  portion 
thereof  heretofore  sold  unto  H.  G.  Bateman,  by  deed  dated  February 
24th,  1892,  and  recorded  in  said  office  in  Record  Book  of  Deeds  36,  page 
551,  said  portion  so  sold  and  conveyed  by  said  deed  last  mentioned  being 
described  as  follows,  to-wit: — 

Beginning  at  a  point  ten  hundred  and  sixty  (1060  ft.)  East  of  the 
1/4  Section  corner  on  the  South  side  of  Section  Thirty-three  (33),  Town¬ 
ship  2  North,  Range  12  West  and  run  West  2.81  chains,  thence  north 
six  and  one  half  (6^4)  degrees  east,  about  nine  chains  to  the  south  bank 
of  the  Arkansas  River,  thence  down  said  River  and  along  the  South 
bank  thereof  to  the  West  boundary  of  the  land  conveyed  by  R.  W. 


9 


Worthen  to  the  Directors  of  the  Arkansas  Deaf  Mute  Institute  at  or 
near  the  northeast  corner  of  Lot  Twenty-nine  (29)  of  Worthen’s  sub¬ 
division  of  the  Southeast  1/4  Section  Thirty-three  (33)  aforesaid,  thence 
South  six  and  one-half  (G1/?)  degrees  west,  6  88/100  chains  to  the  point 
of  beginning.  Said  land  is  situated  in  Lot  twenty -nine  (29)  of  Worthen’s 
subdivision  aforesaid,  and  contains  3  01/100  acres  more  or  less,  leaving 
the  quantity  of  land  last  hereby  conveyed  15.64  acres  more  or  less. 

Also  a  tract  in  S.  1/2  S.  E.  1/4  S.  W.  1/4  Section  33  T.  2  N.,  R.  12 
W.,  beginning  5.05  chains  north  of  1/4  Section  corner  on  south  side 
said  Section  33  and  run  North  4.95  chains,  thence  W.  9.53  chains,  thence 
S.  62  1/2  degrees  E.  10.74  chains  to  beginning,  containing  2.40  acres, 
lying  and  being  north  of  the  County  Road.  Said  property  last  described 
is  contained,  in  the  aforesaid  last  mentioned  deed  from  Zeb  Ward  et  ux, 
dated  February  5th,  1890. 

Parcel  Nine:  Lot  two  (2)  Block  eleven  (11)  Park  View  Addition  to 
Little  Rock,  Arkansas,  being  the  property  sold  and  conveyed  unto  the 
Arkansaw  Water  Company  by  G.  M.  Gadsby  and  wife  by  deed  dated 
December  twenty-seventh,  1915,  and  recorded  in  said  office,  in  and  for 
the  County  of  Pulaski,  in  the  State  of  Arkansas,  on  or  about  the  17 
day  of  January,  1916. 

Parcel  Ten  :  A  tract  125'  square  in  the  northeast  quarter,  southwest 
quarter,  Section  Thirty-three  (33)  Township  2  North,  Range  12  West, 
Pulaski  County,  Arkansas,  more  particularly  described  as  follows  : 

“Begin  at  a  point  on  the  east  and  west  center  line  through  the  said 
southwest  quarter  of  Section  33,  Nine  hundred  twenty-one  and  seventy- 
six  one  hundredths  feet  (921.76')  east  of  the  stone  corner  at  the  center  of 
said  southwest  quarter  Section  33,  thence  east  One  hundred  twenty-five 
(125)  feet  to  the  southeast  corner  of  the  tract  in  the  name  of  W.  F.  Booth 
described  in  Pulaski  County  Deed  Record  Book  No.  113,  Page  356; 
thence  North  with  the  east  line  of  said  W.  F.  Booth  tract  125  feet;  thence 
West  one  hundred  twenty-five  (125)  feet;  thence  south  One  hundred 
twenty-five  (125)  feet  to  point  of  beginning;  containing  15,625  square 


10 


feet”.  And  also  all  the  leasehold  interest  of  the  Arkansaw  Water  Com¬ 
pany  in  and  to  the  premises  described  in  the  deed  next  hereinafter  men¬ 
tioned,  and  all  easements,  rights  of  way,  privileges  and  options  and 
rights  whatsoever  thereby  transferred  to  it,  all  of  the  property  in  this 
Parcel  Ten  described,  conveyed  or  transferred  being  that  conveyed  and 
transferred  unto  the  Arkansaw  Water  Company  by  the  Capital  City 
Water  Company  in  and  by  its  deed  dated  the  18tli  day  of  January, 
1916,  and  recorded  in  said  office,  on  or  about  the  18th  day  of  January, 


Also  all  buildings,  stand  pipes,  reservoirs,  wells,  machinery,  mains, 
pipes,  pipe  lines,  water  works  plants,  tanks,  shops,  structures,  equipment, 
fixtures,  engines,  boilers,  pumps,  tools,  meters,  appliances  and  all  other 
apparatus  which  are  now  owned  or  may  hereafter  be  acquired  by  the 
Company. 

III. 

All  corporate  and  other  franchises,  ordinances,  permits,  licenses, 
rights,  easements,  rights  of  way,  leases  and  leasehold  interests,  grants, 
privileges  and  immunities  belonging  to  or  which  may  be  hereafter  owned, 
held  or  enjoyed  by  the  Company. 


IY. 

All  other  property  of  the  Company,  real  and  personal,  which  it  now 
owns  or  may  hereafter  acquire  or  in  which  it  may  have  or  acquire  any 
interest. 

Together  with  all  and  singular  the  tenements,  hereditaments  and 
appurtenances  belonging  or  in  any  wise  appertaining  to  the  aforesaid 
property  or  any  part  thereof ;  with  the  reversion  and  reversions,  remain¬ 
der  and  remainders,  tolls,  rents,  revenues,  issues,  income,  product  and 
profits  thereof,  and  all  the  estate,  right,  title,  interest  and  claim  what¬ 
soever,  at  law  as  well  as  in  equity,  which  the  Company  now  has  or  may 
hereafter  acquire  in  and  to  the  aforesaid  property  and  franchises  and 
every  part  and  parcel  thereof. 


11 


Specifically  reserving  and  excepting,  however,  from  the  lien  of  this 
Indenture,  all  accounts  receivable,  bills  receivable,  cash  on  hand  or  in 
bank,  investments  of  reserve  funds,  and  such  funds  themselves  in  what¬ 
soever  form  they  may  assume,  choses  in  action,  contracts,  shares  of  stock 
and  bonds,  provided,  however,  and  it  is  hereby  expressly  agreed,  that  if  (1) 
default  shall  be  made  in  the  payment  of  any  interest  on  any  bond  hereby 
secured,  and  such  default  shall  continue  for  ninety  days,  or  (2) 
default  shall  be  made  in  the  payment  of  any  principal  hereby  secured, 
or  (3)  default  shall  be  made  hereunder  by  the  Company  in  the  observ¬ 
ance  or  performance  of  any  other  of  the  covenants,  agreements  or 
conditions  on  its  part  in  this  Indenture  contained,  and  such  default  shall 
continue  for  ninety  days  after  written  notice  to  the  Company  by  the 
Trustees  or  by  any  holder  of  the  bonds  hereby  secured  and  then  outstand¬ 
ing,  then  and  in  every  such  event,  all  the  following  property  then  held, 
owned  and  possessed  by  the  Company,  viz. :  all  accounts  receivable,  bills 
receivable,  cash  on  hand  and  in  bank,  investments  of  reserve  funds  and 
such  funds  themselves,  in  whatsoever  form  they  shall  then  be,  choses  in 
action,  contracts,  and  all  shares  of  stock  and  bonds,  shall  forthwith 
become  and  be  subject  to  the  lien  of  this  Indenture,  and  each  of  them  or 
the  evidences  thereof,  shall  on  demand  be  delivered  to  the  Trustees. 

To  have  and  to  hold  all  said  properties,  real  and  personal,  mort¬ 
gaged  and  conveyed  by  the  Company  as  aforesaid  or  intended  so  to  be, 
unto  the  Trustees  and  their  successors  and  assigns  forever ; 

In  trust,  nevertheless,  upon  the  terms  and  trusts  herein  set  forth, 
for  those  who  shall  hold  the  bonds  and  coupons  issued  and  to  be  issued 
hereunder,  or  any  of  them,  without  preference  of  any  of  said  bonds  and 
coupons  over  any  others  thereof  by  reason  of  priority  in  the  time  of  the 
issue,  maturity  or  negotiation  thereof,  or  otherwise  howsoever. 

It  is  hereby  covenanted,  declared  and  agreed,  by  and  between  the 
parties  hereto,  that  all  such  bonds  and  coupons  are  to  be  issued,  certi¬ 
fied  and  delivered,  and  that  all  property  subject  or  to  become  subject 


12 


hereto  is  to  be  held  subject  to  the  further  covenants,  conditions,  uses  and 
trusts  hereinafter  set  forth,  and  the  Company,  for  itself  and  its  suc¬ 
cessors,  doth  hereby  covenant  and  agree  to  and  with  the  Trustees,  for 
the  benefit  of  those  who  shall  hold  said  bonds  and  interest  coupons,  or 
any  of  them,  as  follows : 


ARTICLE  I. 

Execution  and  Issue  of  Bonds. 

Section  1.  This  Indenture  creates  a  continuing  lien  to  secure  the  full 
and  final  payment  of  the  principal  and  interest  of  all  bonds  which  may, 
from  time  to  time,  be  made,  authenticated  and  delivered  hereunder.  The 
amount  of  bonds  which  may  be  so  made,  authenticated  and  delivered  here¬ 
under  is  not  limited  except  as  hereinafter  specifically  set  forth,  and  except 
that  the  amount  of  bonds  issued  and  outstanding  hereunder  shall  at  no 
time  exceed  the  limit  of  indebtedness  of  the  Company  as  fixed  from 
time  to  time  by  its  stockholders  or  the  amount  permitted  by  law.  All 
bonds  issued  under  and  in  pursuance  of  this  Indenture  and  at  any  time 
outstanding  shall  in  all  respects  be  equally  and  ratably  secured  hereby 
without  preference,  priority  or  distinction  on  account  of  the  actual  time  or 
times  of  the  issue  of  the  said  bonds  or  of  any  of  them,  so  that  all  bonds  at 
any  time  issued  and  outstanding  hereunder  shall  have  the  same  right,  lien 
and  preference  under  and  by  virtue  of  this  Indenture,  and  shall  all  be 
equally  secured  hereby,  with  like  effect  as  if  they  had  all  been  made,  issued 
and  certified  simultaneously  on  the  date  hereof,  whether  the  same,  or  any 
of  them,  shall  actually  be  sold  or  disposed  of  at  such  date,  or  whether  they, 
or  any  of  them,  shall  be  sold  or  disposed  of  at  some  future  date,  or  whether 
they,  or  any  of  them,  shall  have  been  authorized  to  be  issued  under  the 
provisions  of  Section  2  of  this  Article  I,  or  may  be  authorized  to  be  issued 
hereafter  pursuant  to  the  provisions  of  Section  3,  Section  4,  or  Section  5, 
of  this  Article  I. 

Section  2.  Bonds  for  the  aggregate  principal  amount  of  one  million 
four  hundred  thousand  dollars  ($1, 400, 000),  being  bonds  of  Series  A, 


13 


bearing  interest  at  the  rate  of  6%  per  annum  and  maturing  November  1, 
1930,  in  such  denominations  as  the  Board  of  Directors  of  the  Company 
may  determine,  shall  forthwith  be  executed  by  the  Company  and  delivered 
to  the  Corporate  Trustee  and  shall  be  authenticated  by  the  Corporate 
Trustee,  and  delivered  (either  before  or  after  the  filing  or  recording 
hereof),  in  accordance  with  the  order  or  orders  of  the  Company,  evi¬ 
denced  by  a  writing  or  writings  signed  by  its  President  or  a  Vice- 
President  and  Treasurer  or  Assistant  Treasurer. 

Section  3.  Bonds  for  the  aggregate  principal  amount  of  one  hun¬ 
dred  and  fifty  thousand  dollars  ($150,000)  shall  from  time  to  time  be 
executed  by  the  Company  and  delivered  to  the  Corporate  Trustee  and 
shall  be  from  time  to  time  authenticated  by  the  Corporate  Trustee  and 
delivered  to  the  Company,  provided  the  net  earnings  of  the  Company,  cal¬ 
culated  as  hereinafter  provided,  for  twelve  consecutive  calendar  months 
within  the  fourteen  calendar  months  immediately  preceding  any  appli¬ 
cation  for  authentication  and  delivery  of  such  bonds,  shall  be,  in  the 
aggregate,  not  less  than  one  and  three-quarters  times  the  interest  charge 
for  a  like  period  upon  all  bonds  already  outstanding  under  this  Inden¬ 
ture  and  those  applied  for.  Bonds  are  to  be  authenticated  and  deliv¬ 
ered  under  this  Section  upon  receipt  by  the  Corporate  Trustee  of : 

(A)  A  copy  of  a  resolution  certified  to  have  been  adopted  by  the 
Board  of  Directors  of  the  Company  requesting  the  Corporate  Trustee  to 
authenticate  and  deliver  such  bonds,  specifying  the  principal  amount  of 
bonds  called  for,  and  their  denominations,  series  letter,  form,  interest 
rate,  maturity  and  redemption  provisions,  and  naming  the  officer  or 
officers  of  the  Company  to  whom  such  bonds  shall  be  delivered ; 

(B)  A  certificate  signed  by  the  Treasurer  or  an  Assistant  Treasurer 
of  the  Company  which  shall  state  the  net  earnings  of  the  Company  for 
a  period  of  twelve  consecutive  calendar  months  within  the  fourteen 
calendar  months  immediately  preceding  the  application  for  autlientica 
tion  and  delivery  of  said  bonds,  showing  how  the  same  have  been  cal- 


14 


ciliated  and  to  that  end  specifying  the  gross  earnings  and  also  the 
respective  amounts  charged  to  the  different  distributive  groups  of 
operating  expenses,  the  net  earnings  to  be  computed  by  deducting  from 
the  Company’s  gross  earnings  its  operating  expenses,  including  all 
expenditures  for  taxes,  rentals,  repairs,  current  maintenance,  and  insur¬ 
ance,  but  not  deducting  any  charges  made  against  surplus  account  for 
renewals,  replacements,  or  depreciation,  provided,  however,  that  the 
amount  included  in  operating  expenses  and  deducted  from  gross  earn¬ 
ings  for  repairs  and  current  maintenance  shall  in  no  case  be  less  than  an 
amount  equal  to  six  per  cent,  of  gross  earnings. 

Section  4.  From  time  to  time  hereafter  the  Company,  in  addition 
to  the  bonds  authorized  to  be  issued  under  the  provisions  of  Sections  2 
and  3  of  this  Article  I  may  sign,  seal  and  deliver  to  the  Trustee  and  the 
Trustee  shall  thereupon  authenticate  and  deliver  to  the  Company  addi¬ 
tional  bonds  hereby  secured,  when  the  Company  shall  have  made  any 
permanent  improvements,  extensions  or  additions  to  or  about  its  plants 
or  property,  after  the  date  of  this  Indenture  (including  any  new  or 
additional  property  acquired  or  constructed,  but  not  including  shares 
of  stock,  bonds,  or  other  securities,  or  permanent  improvements,  exten¬ 
sions,  or  additions  acquired  or  constructed  as  substituted  property  under 
the  provisions  of  this  Indenture  with  reference  to  the  release  of  property 
from  the  lien  hereof  or  with  the  proceeds  of  any  property  so  released, 
or  with  insurance  moneys  received  in  payment  of  losses  or  with  any 
moneys  set  aside  or  expended  under  the  provisions  of  Article  VI  of 
this  Indenture,  provided ,  that  the  net  earnings  of  the  Company,  cal¬ 
culated  as  hereinafter  provided,  for  twelve  consecutive  calendar  months 
within  the  fourteen  calendar  months  immediately  preceding  any  appli¬ 
cation  for  authentication  and  delivery  of  bonds,  shall  be,  in  the  aggre¬ 
gate,  not  less  than  one  and  three-quarters  times  the  interest  charge 
for  a  like  period  upon  ail  bonds  already  outstanding  under  this  Inden¬ 
ture  and  those  applied  for.  Bonds  are  to  be  certified  and  delivered 
under  this  Section  only  for  an  amount  of  principal  equal  to  eighty 


15 


per  cent.  (80%)  of  the  actual  cash  cost  and  fair  value  to  the  Com¬ 
pany  of  such  permanent  improvements,  extensions  or  additions,  and 
only  upon  receipt  by  the  Corporate  Trustee  of : 

(A)  A  copy  of  a  resolution  certified  to  have  been  adopted  by  the 
Board  of  Directors  of  the  Company  requesting  the  Corporate  Trustee  to 
authenticate  and  deliver  bonds,  specifying  the  principal  amount  of  bonds 
called  for,  and  their  denominations,  series  letter,  form,  interest  rate, 
maturity,  and  redemption  provisions,  and  stating  the  actual  cash  cost 
to  the  Company  of  the  permanent  improvements,  extensions,  or  additions 
included  in  the  certificate  next  hereinafter  mentioned,  and  naming  the 
officer  or  officers  of  the  Company  to  whom  such  bonds  shall  be  delivered; 

(B)  A  certificate  signed  by  the  President  or  a  Vice-President  of  the 
Company  and  by  an  engineer  appointed  by  its  Board  of  Directors  and 
approved  by  the  Trustees,  stating  in  substance  as  follows : 

(a)  that  in  addition  to  the  property  possessed  by  the  Company  at 
the  date  of  this  Indenture,  the  Company  has  constructed  or  acquired 
certain  permanent  improvements,  extensions  or  additions  to  or  about 
its  plant  and  property  (to  be  described  in  the  certificate  with  reasonable 
detail)  and  that  such  property  is  desirable  in  the  profitable  conduct  of 
the  business  of  the  Company; 

(b)  that  the  Company  has  actually  expended  upon  such  permanent 
improvements,  extensions  or  additions  the  amount  stated  in  the  above- 
mentioned  resolution  of  the  Board  of  Directors  as  the  actual  cash  cost 
thereof  and  that  the  amount  so  expended  was  not,  in  the  signers’  opinion, 
in  excess  of  the  fair  value  to  the  Company  of  such  permanent  improve¬ 
ments,  extensions  or  additions; 

(c)  that  no  part  of  such  permanent  improvements,  extensions  or 
additions,  specified  in  such  certificate,  have  been  included  in  any  pre¬ 
ceding  certificate  made  the  basis  of  any  other  issue  of  bonds  hereunder 
or  of  the  withdrawal  of  any  money  held  by  the  Trustees,  or  have  been 
acquired  as  substituted  property  under  the  provisions  of  this  Indenture 


16 


♦ 


with  reference  to  the  release  of  property  from  the  lien  hereof  or  with 
insurance  moneys  or  moneys  set  aside  or  expended  under  the  pro¬ 
visions  of  Article  VI  of  this  Indenture. 

i 

(d)  the  net  earnings  of  the  Company  for  a  period  of  twelve  consecu¬ 
tive  calendar  months  within  the  fourteen  calendar  months  immediately 
preceding  the  application  for  authentication  and  delivery  of  bonds,  show¬ 
ing  how  the  same  have  been  calculated,  and  to  that  end  specifying  the 
gross  earnings  and  also  the  respective  amounts  charged  to  the  different 
distributive  groups  of  operating  expenses  ;  the  net  earnings  of  the  Com¬ 
pany  to  be  computed  by  deducting  its  operating  expenses,  including  all 
expenditures  for  taxes,  rentals,  repairs,  current  maintenance,  and  insur¬ 
ance,  from  its  gross  earnings,  but  not  deducting  any  charges  made  against 
surplus  account  for  renewals,  replacements,  or  depreciation,  provided 
however  that  the  amount  included  in  operating  expenses  and  deducted 
from  gross  earnings  for  repairs  and  current  maintenance  shall  in  no  case 
be  less  than  an  amount  equal  to  six  per  cent,  of  gross  earnings. 

( e )  that  the  Company  is  not,  to  the  knowledge  of  the  signers,  in 
default  in  the  performance  of  any  of  the  terms  or  covenants  of  this 
Indenture. 

( C )  Such  instruments  of  conveyance,  assignment  and  transfer  as 
may  be  necessary,  in  the  opinion  of  counsel  (who  may  be  of  counsel  to 
the  Company)  selected  by  the  Board  of  Directors  of  the  Company  and 
approved  by  the  Trustees,  to  vest  in  the  Trustees,  to  hold  as  part  of  the 
mortgaged  property  hereunder,  all  the  right,  title  and  interest  of  the 
Company  in  and  to  any  property  with  respect  to  which  the  authentication 
of  bonds  shall  be  requested,  or  the  opinion  of  such  counsel  that  no  such 
instruments  are  necessary  for  such  purposes,  and  also  the  opinion  of  such 
counsel  to  the  effect  that  the  Company  has  title  to  such  property,  forming 
the  basis  of  such  issue  of  bonds,  subject  to  no  deed  of  trust,  mortgage,  lien, 
charge  or  incumbrance  thereon  or  affecting  the  title  thereto,  prior  to  this 
Indenture,  except  taxes  for  the  then  current  year. 


17 


Whenever  under  the  provisions  of  this  Indenture  the  gross  and 
net  earnings  of  the  Company  are  required  to  be  computed  for  a  stated 
period,  and  any  of  the  property  of  the  Company  shall  have  been  owned 
by  it  during  a  part  but  not  during  the  whole  of  such  period,  then  and  in 
every  such  case  the  gross  and  net  earnings  of  such  property  during 
such  part  of  such  period  as  shall  have  preceded  the  acquisition  thereof  by 
the  Company,  shall  be  treated  as  gross  and  net  earnings  of  the  Com¬ 
pany  for  such  part  of  such  period  for  the  purposes  of  this  Indenture  and 
shall  be  computed  on  the  basis  hereinbefore  provided. 

Permanent  improvements,  extensions  and  additions  in  process  of 
construction  or  erection  and  so  far  as  actually  constructed  or  erected 
and  paid  for,  and  placed  under  the  lien  of  this  Indenture,  shall  be 
deemed  permanent  improvements,  extensions  and  additions  within  the 
meaning  of  this  Article. 

Section  5.  From  time  to  time  hereafter  the  Company,  in  substitu¬ 
tion  for  and  in  place  of  any  bonds  theretofore  issued  under  any  of  the 
provisions  of  this  Indenture,  may  sign,  seal  and  deliver  to  the  Corporate 
Trustee  and  the  Corporate  Trustee  shall  thereupon  authenticate  and 
deliver  to  the  Company  bonds  hereby  secured,  in  principal  amount  equal 
to  that  of  the  bonds  in  substitution  for  and  in  place  of  which  such  new 
bonds  are  signed,  sealed  and  delivered,  upon  receipt  by  the  Corporate 
Trustee  of : 

(A)  A  copy  of  a  resolution  certified  to  have  been  adopted  by  the 
Board  of  Directors  of  the  Company  requesting  the  Corporate  Trustee  to 
authenticate  and  deliver  bonds,  specifying  the  principal  amount  of  bonds 
called  for,  and  their  denominations,  series  letter,  form,  interest  rate, 
maturity,  and  redemption  provisions,  and  likewise  specifying  the  prin¬ 
cipal  amount  of  bonds  in  substitution  for  and  in  place  of  which  such 
new  bonds  are  to  be  issued,  and  their  series  letter,  serial  numbers,  and 
maturity,  and  naming  the  officer  or  officers  of  the  Company  to  whom 
such  new  bonds  shall  be  delivered; 


18 


( B )  An  amount  of  cash  equal  to  the  principal  amount  with  interest 
thereon  to  maturity  of  all  bonds  in  substitution  for  and  in  place  of 
which  such  new  bonds  are  to  be  issued,  provided,  however,  that  in  lieu 
of  the  deposit  of  cash  against  the  principal  and  interest  of  any  par¬ 
ticular  bond  or  bonds,  the  Company  may  surrender  such  bond  or  bonds 
for  cancellation  with  all  unmatured  coupons  thereto  appertaining. 

Section  6.  The  resolution,  certificates  and  other  instruments  provided 
for  in  this  Article  may  be  accepted  by  the  Trustees  as  satisfactory  and 
conclusive  evidence  as  to  the  statements  therein  contained  and  shall  be 
full  authority  to  the  Trustees  for  the  authentication  and  delivery  of 
bonds;  but  before  authenticating  and  delivering  an  instalment  of  bonds 
the  Trustees  may,  in  their  discretion,  and  shall,  if  requested  in  writing 
so  to  do  by  the  holders  of  not  less  than  five  per  cent,  of  the  bonds  then 
outstanding  hereunder  and  furnished  with  security  and  indemnity  satis¬ 
factory  to  them,  cause  to  be  made  such  independent  investigation  as  they 
may  see  fit,  and,  in  that  event,  may  decline  to  authenticate  or 
deliver  such  instalment  of  bonds  unless  satisfied  by  such  investigation 
of  the  truth  and  accuracy  of  the  matters  so  investigated.  The  expense 
of  such  investigation  shall  be  paid  by  the  Company,  or  if  paid  by  the 
Trustees  shall  be  repaid  by  the  Company  upon  demand. 

Section  7.  The  bonds  and  coupons  to  be  secured  hereby  shall  be 
substantially  of  the  tenor  and  effect  hereinbefore  recited,  except  that  at 
the  election  of  the  Board  of  Directors  of  the  Company,  expressed  from 
time  to  time  by  resolution,  (1)  bonds  may  be  issued  in  denominations  of 
$1000,  $500,  and  $100;  and  (2)  shall  bear  interest  at  such  rate  or  rates, 
and  shall  be  redeemable  at  such  redemption  price  and  shall  be  payable  at 
such  time  (not,  however,  earlier  than  November  1,  1930)  as  may  be  fixed 
and  determined  by  the  Board  and  designated  in  said  bonds  when  issued. 
The  initial  issue  of  bonds  hereunder  shall  consist  of  $1,400,000  principal 
amount  of  bonds  of  Series  A;  they  shall  bear  interest  at  the  rate  of  six 
per  cent.  (6%)  per  annum,  shall  mature  November  1,  1930,  and  shall 
be  redeemable  at  par  and  accrued  interest  and  a  premium  of  five  per 


19 


cent.  (5%)  on  par  on  any  interest  date  to  and  including  November  1, 
1925,  and  at  par  and  accrued  interest  and  a  premium  of  two  per  cent. 
(2%)  on  par  thereafter. 

No  bond  shall  be  secured  hereby  unless  there  shall  be  endorsed 
thereon  the  certificate  of  the  Corporate  Trustee  substantially  in  the  form 
hereinbefore  recited,  stating  that  such  bond  is  one  of  the  bonds  (or 
temporary  bonds)  herein  described;  and  such  certificate  shall  be  con¬ 
clusive  evidence  that  the  bond  upon  which  it  is  endorsed  is  duly  issued 
and  is  secured  hereby. 

The  bonds  issued  hereunder  may  be  issued  in  series,  and  the  bonds 
of  each  series  shall  be  designated  by  a  distinguishing  letter  or  letters 
of  the  English  alphabet.  All  bonds  of  any  one  series  at  any  time  simul¬ 
taneously  outstanding,  shall  be  identical  in  respect  of  the  interest  rate, 
redemption  provisions,  and  maturity,  but  bonds  of  the  same  series 
may  be  of  different  denominations.  Irrespective  of  the  series  letter  or 
letters,  the  bonds  for  $1000  each  shall  be  numbered  consecutively  from 
1  upwards,  the  bonds  for  $500  each  from  D1  upwards  and  the  bonds 
for  $100  each  from  Cl  upwards. 

Any  of  the  bonds  at  any  time  issued  under  this  Indenture  may, 
from  time  to  time,  at  the  request  of  the  Company,  be  exchanged  for  other 
bonds  of  some  one  or  more  other  series  or  of  the  same  series  issuable 
hereunder  of  an  equal  aggregate  principal  amount,  and  the  Corporate 
Trustee,  upon  the  request  of  the  Company,  shall  authenticate  and  deliver 
bonds  as  specified  in  such  request  for  the  purpose  of  such  exchange.  In 
case  of  any  such  exchange,  the  Corporate  Trustee  shall  forthwith  cancel 
the  surrendered  bond  or  bonds  and  the  accompanying  coupons,  and,  on 
its  written  request,  deliver  the  same  to  the  Company. 

Any  holder  of  any  bond  secured  hereby  shall  have  the  privilege  at 
any  time  before  maturity  of  exchanging  any  bond  or  bonds  held  by  him 
for  other  bonds  of  the  same  maturity  and  interest  rate,  but  of  different 
denomination,  and  such  exchange  shall  be  made  by  the  Company  without 
expense  to  the  holder  on  the  tender  for  cancellation  of  the  bond  or  bonds 
so  desired  to  be  exchanged. 


20 


Section  8.  The  Company  shall  keep  at  its  office  or  agency  in  the 
City  of  New  York,  and  in  the  City  of  Chicago  and  at  such  other  place  or 
places,  if  any,  as  shall  be  designated  in  any  bond  issued  hereunder,  books 
for  the  registration  and  transfer  of  bonds  issued  hereunder,  which,  at 
all  reasonable  times,  shall  be  open  for  inspection  by  the  Trustees  or  by 
the  holder  of  any  bond  issued  hereunder;  and,  upon  presentation  for 
such  purpose  at  any  such  office  or  agency,  the  Company  will  register 
or  cause  to  be  registered  therein  the  ownership  of  any  bond  issued  under 
this  Indenture  and  entitled  to  registration  at  such  office,  such  registra¬ 
tion  being  noted  on  the  bond.  After  such  registration  no  transfer  shall 
be  valid  unless  made  on  the  said  books  by  the  registered  owner  in  person, 
or  by  his  duly  authorized  attorney,  and  similarly  noted  on  the  bond; 
but  the  bond  may  be  discharged  from  registration  by  being  in  like 
manner  transferred  to  bearer,  and  thereupon  transferability  by  delivery 
shall  be  restored;  and  such  bond  may  again,  from  time  to  time,  be  regis¬ 
tered,  or  transferred  to  bearer,  as  before.  Such  registration,  however, 
shall  not  affect  the  negotiability  of  the  coupons,  but  every  such  coupon 
shall  continue  to  be  transferable  by  delivery  merely,  and  shall  remain 
payable  to  bearer. 

Section  9.  All  the  bonds  issued  hereunder  shall,  from  time  to  time, 
be  executed  on  behalf  of  the  Compan}^  by  its  President  or  one  of  its  Vice- 
Presidents  and  its  corporate  seal  shall  be  thereunto  affixed  and  attested 
by  its  Secretary  or  one  of  its  Assistant  Secretaries.  The  coupons  to  be 
attached  to  the  bonds  shall  bear  the  fac-simile  signature  of  the  present 
Treasurer  of  the  Company. 

In  case  any  of  the  officers  who  shall  have  signed  and  sealed  any  bonds 
or  attested  the  seal  thereon,  shall  cease  to  be  such  officers  of  the  Company 
before  the  bonds  so  signed  and  sealed  shall  have  been  actually  authenti¬ 
cated  by  the  Trustee  or  delivered  by  the  Company,  such  bonds  never¬ 
theless  may  be  issued,  authenticated  and  delivered  with  the  same  force 
and  effect  as  though  the  person  or  persons  who  signed  and  sealed  such 
bonds  had  not  ceased  to  be  such  officer  or  officers  of  the  Company. 


21 


Before  authenticating  any  bonds  the  Trustee  shall  cut  off,  cancel 
and  deliver  to  the  Company  all  matured  coupons  thereon. 

Section  10.  Until  permanent  bonds  are  ready  for  delivery,  there 
may  be  issued,  authenticated  and  delivered  in  lieu  of  any  thereof, 
temporary  printed  bonds  in  bearer  form  substantially  of  the  tenor  of 
the  bonds  hereinbefore  described  and  of  the  same  denominations  and  bear¬ 
ing  the  same  serial  numbers,  except  that  no  coupons  shall  be  attached 
thereto,  and  until  exchanged  for  permanent  bonds,  such  temporary  bonds 
shall  be  entitled  to  the  lien  and  benefit  of  this  Indenture.  Upon  such 
exchange,  which  the  Company  shall  make  at  its  own  expense  and  without 
making  any  charge  therefor,  such  temporary  bonds  shall  be  destroyed  by 
the  Corporate  Trustee,  and  upon  the  exchange  of  all  said  bonds  a  certifi¬ 
cate  of  such  destruction  shall  be  delivered  to  the  Company.  When  and  as 
interest  is  paid  upon  temporary  bonds,  the  fact  of  such  payment  shall  be 
noted  thereon.  The  Company  shall  proceed  with  all  reasonable  diligence 
to  execute  and  deliver  said  permanent  bonds. 

Section  11.  Upon  receipt  by  the  Company  and  the  Corporate  Trustee 
of  evidence  satisfactory  to  them,  of  the  loss,  destruction  or  mutilation  of 
any  outstanding  bond  hereby  secured,  and  of  indemnity  satisfactory  to 
them,  and  upon  surrender  and  cancellation  of  such  bond  if  mutilated,  the 
Company  may  execute,  and  the  Corporate  Trustee  may  authenticate  and 
deliver,  a  new  bond  of  the  same  series  and  of  the  like  tenor  bearing  the 
same  serial  number,  to  be  issued  in  lieu  of  such  lost,  destroyed  or  muti¬ 
lated  bond. 

Section  12.  As  to  all  bonds  registered  as  to  principal,  the  person  in 
whose  name  the  same  shall  be  registered  shall  be  deemed  and  regarded 
as  the  owner  thereof,  for  all  purposes  of  this  Indenture,  and  thereafter 
payment  of  or  on  account  of  the  principal  of  such  bond,  shall  be  made 
only  to  or  upon  the  order  in  writing  of  such  registered  holder  thereof, 
but  such  registration  may  be  changed  as  above  provided.  All  such 
payments  shall  be  valid  and  effectual  to  satisfy  and  discharge  the  liability 


22 


upon  such  bonds  to  the  extent  of  the  sum  or  sums  so  paid.  The  Com¬ 
pany  and  the  Trustees  may  deem  and  treat  the  bearer  of  any  bond,  which 
shall  not  at  the  time  be  registered  as  to  principal,  and  the  bearer  of 
any  interest  coupon,  whether  the  bond  to  which  the  same  appertains  shall 
be  registered  or  not,  as  the  absolute  owner  of  such  bond  or  coupon  for 
the  purpose  of  receiving  payment  thereof,  and  for  all  other  purposes 
whatsoever,  and  the  Company  and  the  Trustees  shall  not  be  affected  by 
any  notice  to  the  contrary. 


ARTICLE  II. 

Particular  Covenants  of  the  Company. 

The  Company  hereby  covenants  and  agrees : 

Section  1.  That  it  is  lawfully  seized  and  possessed  of  all  its  afore¬ 
said  mortgaged  premises,  property,  rights,  privileges  and  franchises  and 
that  it  has  good  right  and  lawful  authority  to  mortgage  the  same  as 
provided  in  and  by  this  Indenture. 

Section  2.  That  it  will  pay  the  principal  and  interest  of  all  the 
bonds  duly  issued  hereunder,  according  to  the  terms  thereof  and,  so  far 
as  it  may  lawfully  contract  to  do  so,  without  deduction  for  any  taxes, 
assessments  or  other  governmental  charges  which  the  Company  may  be 
required  to  pay  thereon,  or  authorized  to  retain  therefrom  under  any 
present  or  future  law  or  requirement  of  the  United  States  of  America, 
or  any  State,  county,  municipality  or  other  governmental  subdivision 
thereof,  the  Company  hereby  agreeing,  so  far  as  it  lawfully  may,  to  pay 
all  such  taxes,  assessments  and  other  charges.  As  the  coupons  annexed 
to  said  bonds  are  paid  they  shall  be  cancelled.  Coupons  shall  not  be 
kept  alive  after  maturity  by  extension  thereof  nor  by  the  purchase 
thereof,  by  or  on  behalf  of  the  Company.  No  coupon  belonging  to  any 
bond  hereby  secured,  which  in  any  way,  at  or  after  maturity,  shall  have 
been  transferred  or  pledged,  separate  or  apart  from  the  bond  to  which 
it  relates,  or  which  shall  in  any  manner  have  been  kept  alive  after 


23 


maturity  by  extension  or  by  tbe  purchase  thereof  by  or  on  behalf  of  the 
Company,  shall  be  entitled,  in  case  of  a  default  hereunder,  to  any  benefit 
of  or  from  this  Indenture,  except  after  the  prior  payment  in  full  of  the 
principal  of  the  bonds  issued  hereunder  and  of  all  coupons  and  interest 
obligations  not  so  transferred,  pledged,  kept  alive  or  extended. 

Section  3.  That  it  will  maintain  an  office  or  agency  in  each  of  the 
Cities  of  Chicago  and  New  York,  while  any  of  said  bonds  are  outstand¬ 
ing,  where  notices,  presentations  and  demands  to  or  upon  it  in  respect 
of  said  bonds  or  their  coupons  may  be  given  or  made,  and  for  the  pay¬ 
ment  of  the  principal  and  interest  thereof  and  that  it  will  keep  on  file 
with  the  Corporate  Trustee  a  written  statement  showing  the  location  of 
the  offices  or  agencies  so  from  time  to  time  maintained  by  it. 

Section  4.  That  it  will  duly  pay  and  discharge,  as  the  same  shall 
become  due  and  payable,  all  real  estate  and  personal  taxes,  assessments 
and  governmental  and  other  charges  lawfully  levied  and  imposed  by 
any  state,  county  or  municipality  upon  the  mortgaged  premises,  includ¬ 
ing  the  franchises,  earnings  and  business  of  the  Company;  and  that  it 
will  not  suffer  any  mechanic’s,  laborer’s,  statutory  or  other  lien  which 
might  or  could  be  held  to  be  prior  to  the  lien  of  this  Indenture,  to  be 
created  or  to  remain  outstanding  upon  the  mortgaged  property,  or  any 
part  thereof;  provided,  however,  that  nothing  contained  in  this  Inden¬ 
ture  shall  require  the  Company  to  pay  such  tax,  assessment,  lien  or 
charge  so  long  as  the  Company  in  good  faith  shall  contest  the  validity 
thereof,  provided  the  security  afforded  by  this  indenture  shall  not  be 
endangered  by  any  sale  or  otherwise  on  account  of  any  such  tax  or  lien 
so  contested. 

Section  5.  That  it  will  keep  all  the  property  which  is  at  any  time 
covered  by  this  Indenture,  which  is  not  fireproof  and  which  is  of  a  char¬ 
acter  usually  insured  by  companies  similarly  situated,  insured  against 
loss  or  damage  by  fire,  to  a  reasonable  amount,  by  reputable  insurance 

companies,  any  one  loss  in  excess  of  $5,000  to  be  made  payable  to  the 


24 


Trustees  as  their  interest  may  appear.  The  proceeds  of  a'ny  insurance  on 
any  part  of  its  mortgaged  property,  which  may  be  received  by  the  Trustees 
shall  he  held  and  applied  by  the  Corporate  Trustee  as  hereinafter  pro¬ 
vided  in  Article  V  of  this  Indenture. 

Section  6.  That  it  will  at  all  times  maintain,  preserve  and  keep  its 
property  mortgaged  hereunder,  and  every  part  thereof,  with  the  appur¬ 
tenances  and  every  part  and  parcel  thereof,  in  thorough  repair,  working 
order  and  condition,  and  from  time  to  time  make  all  needful  and  proper 
repairs,  so  that  at  all  times  the  value  of  the  security  for  the  bonds  issued 
hereunder  and  the  efficiency  of  its  property  hereby  mortgaged  shall  be 
fully  preserved  and  maintained,  and,  subject  to  the  provisions  hereof, 
will  maintain,  preserve  and  renew  all  the  rights,  powers,  privileges, 
and  franchises  by  it  owned. 

Section  7.  That  if  it  shall  fail  to  perform  any  of  the  covenants  con¬ 
tained  in  Sections  4,  5  and  6  of  this  Article  II,  the  Trustees,  or  any 
receiver  appointed  hereunder,  may  make  advances  to  perform  the  same 
in  its  behalf;  and  it  hereby  agrees  to  repay  all  sums  so  advanced  in 
its  behalf,  on  demand,  with  interest  at  six  per  cent,  per  annum  after 
demand,  and  all  sums  so  advanced  with  interest  as  aforesaid  shall  be 
secured  hereby,  having  the  benefit  of  the  lien  hereby  created  in  priority 
to  the  indebtedness  evidenced  by  said  bonds  and  coupons;  but  no  such 
advance  shall  be  deemed  to  relieve  the  Company  from  any  default 
hereunder. 

Section  8.  That  it  will  cause  this  Indenture  at  all  times  to  be  kept 
recorded  and  filed  as  a  mortgage,  both  of  real  estate  and  of  personal 
property,  in  such  manner  and  in  such  places  as  may  be  required  by  law 
in  order  to  fully  preserve  and  protect  the  security  of  the  bondholders 
and  all  rights  of  the  Trustees. 

Section  9.  That  it  will,  upon  reasonable  request,  execute  and  de- 
liver  such  further  instruments  and  do  such  further  acts  as  may  be 


25 


necessary  or  proper  to  carry  out  more  effectually  the  purposes  of  this 
Indenture,  especially  to  make  subject  to  the  lien  hereof  any  property  now 
owned  or  hereafter  acquired  by  it  (except  the  property  hereinbefore 
specifically  excepted  from  the  lieu  hereof),  and  to  transfer  to  any  new 
trustee  or  trustees  the  estate,  powers,  instruments  and  funds  held  in 
trust  hereunder. 

Section  10.  That  it  will  not  at  any  time  prior  to  November  1,  1918, 
permit  the  aggregate  of  its  floating  or  unfunded  indebtedness  to  parties 
other  than  American  Water  Works  and  Electric  Company,  Inc.,  and  the 
subsidiary  corporations  of  said  American  Company  to  exceed  an  amount 
equal  to  forty  per  cent.  (40%)  of  its  gross  earnings  during  the  preceding 
fiscal  year  and  that  at  no  time  thereafter  and  prior  to  November  1,  1930, 
shall  such  indebtedness  exceed  twenty-five  per  cent.  (25%)  of  such  gross 
earnings. 

Section  11.  That  it  will  at  any  and  all  times  upon  the  written 
request  of  the  Trustees : 

(a)  permit  the  Trustees  by  their  agents  and  attorneys  to  examine 
all  the  Company’s  books  of  account,  records,  reports  and  other  papers, 
and  to  take  copies  and  extracts  therefrom; 

(b)  furnish  to  the  Trustees  a  detailed  and  true  balance  sheet  show¬ 
ing  accurately  the  financial  condition  of  the  Company;  a  full  and  de¬ 
tailed  statement  of  its  earnings  and  expenses  given  month  by  month 
for  and  during  a  period  of  at  least  twelve  months  prior  to  the  date  of 
such  request;  and  a  full,  complete  and  detailed  schedule  of  the  items  of 
property  covered  by  the  lien  hereof  or  intended  so  to  be,  as  the  Trustees 
may  request. 

The  Trustees  are,  however,  under  no  duty  to  make  any  such  exami¬ 
nation  or  to  require  any  such  balance  sheet,  statement  or  schedule. 

Section  12.  That  it  will  not  issue,  or  permit  to  be  issued,  any 
bonds  hereby  secured  in  any  manner  other  than  in  accordance  with  the 
provisions  of  this  Indenture. 


26 


ARTICLE  III. 

Redemption  of  Bonds. 

Tlie  Company,  at  its  option,  may  from  time  to  time  redeem  all  or 
any  of  the  bonds  issued  hereunder,  on  any  interest  day,  at  the  redemption 
price  specified  therein  respectively,  with  accrued  interest  to  the  redemp¬ 
tion  day,  and  in  the  case  of  any  series  of  bonds,  the  bonds  may  specify 
that  until  a  date  to  be  fixed  in  said  bonds  they  shall  be  redeemable  at  a 
certain  price  and  thereafter  at  another  price;  provided  that  in  case  of 
redemption  of  a  part  only  of  said  bonds,  the  particular  bonds  to  be 
redeemed  shall  be  selected  by  the  Corporate  Trustee  by  lot;  and  provided 
also  that  notice  of  intention  to  redeem  shall  be  given,  by  or  on  behalf 
of  the  Company,  by  publication  at  least  once  a  week  for  four  successive 
weeks  immediately  preceding  said  date  fixed  for  redemption  in  one  news¬ 
paper  of  general  circulation  published  in  each  of  the  cities  of  New  York, 
Chicago  and  Little  Rock,  Arkansas.  Before  such  redemption  day  speci¬ 
fied  in  such  notice,  the  Company  shall  deposit  with  the  Corporate  Trustee 
an  amount  sufficient  to  redeem  the  bonds  so  designated  for  redemption, 
to  be  held  for  account  of  the  holders  thereof,  and  to  be  paid  to  them  respec¬ 
tively  upon  presentation  and  surrender  of  said  bonds;  and  after  such 
redemption  day  and  such  deposit  such  bonds  shall  cease  to  bear  interest, 
and  such  bonds  shall  cease  to  be  entitled  to  the  lien  of  this  Indenture,  and 
the  coupons  for  interest  maturing  subsequent  to  that  day  shall  be  void. 

All  bonds  so  redeemed  or  otherwise  purchased  by  the  Trustees  at 
the  request  of  the  Company  under  any  provision  of  this  Indenture  shall 
forthwith  be  canceled,  and  the  Corporate  Trustee  shall  note  hereon  or  on 
one  of  the  originals  hereof  the  fact  of  such  cancellation,  and  thereupon 

deliver  the  bonds  so  canceled  to  the  Company. 

* 

ARTICLE  IY. 

Possession,  Use  and  Release  of  Mortgaged  Property. 

Section  1.  While  not  in  default  in  the  payment  of  the  principal 
or  interest  on  any  bond  hereby  secured,  or  in  respect  to  any  of  the 


27 


covenants,  agreements  or  conditions  on  its  part  in  this  Indenture  con¬ 
tained,  the  Company 

1.  Shall  be  suffered  and  permitted  to  possess,  use  and  enjoy 
all  the  franchises,  rights  and  property  conveyed  by  this  Indenture 
(other  than  moneys  and  securities  which  are  expressly  required  to 
be  deposited  with  the  Corporate  Trustee),  and  to  receive  and  use  the 
rents,  issues,  income,  product,  and  profits  thereof ; 

2.  May  sell  or  otherwise  dispose  of,  without  any  release  by  the 
Trustees,  free  from  the  lien  of  this  Indenture,  {a)  any  machinery, 
equipment,  tools  or  implements  upon  replacing  the  same  with  new 
machinery,  equipment,  tools  or  implements,  of  value  at  least  equal 
to  the  original  value  of  that  so  disposed  of,  and  (b)  any  materials 
or  supplies; 

3.  May,  at  any  time  and  from  time  to  time,  without  any  release 
by  the  Trustees,  surrender  or  assent  to  the  modification  of  any 
franchise  which  it  may  hold*  or  under  which  it  may  be  operating, 
provided,  that  (a)  in  the  event  of  any  such  modification,  the  fran¬ 
chise,  as  modified,  shall,  in  the  opinion  of  counsel,  authorize  the 
continuance  of  the  same  or  an  extended  business  in  the  same  or  an 
extended  territory  during  the  same  or  an  extended  or  unlimited 
period  of  time,  or  (b)  in  the  event  of  any  such  surrender,  the  Com¬ 
pany  shall  receive  in  exchange  a  new  franchise,  license  or  permit 
which,  in  the  opinion  of  counsel,  shall  authorize  it  to  do  the  same 
or  an  extended  business  in  the  same  or  an  extended  territory  dur¬ 
ing  the  same  or  an  extended  or  unlimited  period  of  time,  or  that 
after  the  surrender  of  any  such  franchise,  the  Company  shall  still, 
under  some  other  franchise,  license  or  permit  (subject  to  the  lien 
of  this  Indenture,  and  free  from  any  liens  prior  thereto,  except 
taxes  for  the  then  current  year),  have  the  right,  in  the  opinion  of 
counsel,  to  conduct  the  same  or  an  extended  business  in  the  same 
or  an  extended  territory  during  the  same  or  an  extended  or  un¬ 
limited  period  of  time.  The  words  “the  opinion  of  counsel”  as  used 


28 


in  this  subdivision  3  of  this  Section,  mean  and  shall  be  construed 
to  mean  the  written  opinion,  filed  with  the  Company  and  with  the 
Corporate  Trustee,  of  counsel  (who  may  be  of  counsel  to  the  Com¬ 
pany)  appointed  by  the  Board  of  Directors  of  the  Company  and 
approved  by  the  Trustees. 

Section  2.  The  Company  may  sell  or  otherwise  dispose  of  any  other 
of  its  property  at  any  time  covered  hereby,  and  the  Trustees  shall 
release  the  same  from  the  lien  hereof  upon  receipt  by  the  Corporate 
Trustee  of : 

1.  A  copy  of  a  resolution  certified  to  have  been  adopted  by  the 
Board  of  Directors  of  the  Company,  requesting  such  release; 

2.  A  certificate  signed  by  the  President  or  a  Vice-President  of 
the  Company  and  by  an  engineer  appointed  by  the  Board  of 
Directors  of  the  Company,  and  approved  by  the  Trustees,  stating  in 
substance  as  follows : 

(a)  that  the  retention  of  such  property  is  no  longer  desira¬ 
ble  in  the  conduct  of  the  business  of  the  Company,  and  that  the 
security  hereby  afforded  will  not  be  impaired  by  its  release,  and 

(b)  that  the  Company  has  sold  or  exchanged,  or  contracted 
to  sell  or  exchange,  the  property  so  to  be  released  for  a  con¬ 
sideration  representing,  in  the  opinion  of  the  signers,  its  full 
value  to  the  Company,  which  consideration  may  be  (1)  cash, 
or  (2)  partly  cash  and  partly  obligations  secured  by  purchase 
money  mortgage  upon  the  property  released,  or  (3)  any  other 
property  which  could  be  made  the  basis  of  an  issue  of  bonds 
under  Section  4  of  Article  I  hereof;  such  consideration  to  be 
set  out  in  reasonable  detail  in  such  certificate; 

3.  Any  money  or  obligations  stated  in  said  certificate  to  have 
been  received  or  contracted  for  in  consideration  for  any  such  release ; 
and  if  real  estate  or  other  property  is  included  in  the  considera¬ 
tion  for  such  release,  deeds  or  other  instruments  of  conveyance, 


29 


assignment  or  transfer  sufficient,  in  the  opinion  of  counsel  herein¬ 
after  referred  to,  to  subject  the  same  to  the  lien  of  this  Indenture; 

4.  An  opinion  of  counsel  (who  may  be  of  counsel  to  the  Com¬ 
pany)  appointed  by  the  Board  of  Directors  of  the  Company  and 
approved  by  the  Trustees,  to  the  effect  that  any  obligations  included 
in  the  consideration  for  such  release  are,  in  his  or  their  opinion, 
valid  obligations,  and  that  any  purchase  money  mortgage  securing 
the  same  is  sufficient  to  afford  a  first  lien  upon  the  property  to  be 
released,  and  that  any  deeds  or  other  instruments  of  conveyance, 
assignment  or  transfer  covering  any  property  included  in  the  con¬ 
sideration  for  such  release,  are  sufficient  to  subject  the  same  to  the 
lien  of  this  Indenture,  free  from  any  liens  prior  hereto  except  taxes 
for  the  then  current  year;  or  an  opinion  of  such  counsel  to  the 
effect  that  no  instruments  of  conveyance,  assignment  or  transfer 
are  necessary  to  vest  in  the  Company  the  consideration  received  for 
such  release,  or  to  subject  the  same  to  the  lien  of  this  Indenture. 

Provided,  however,  that  the  water  works  system  and  plant  of  the 
Company  in  the  City  of  Argenta  (known  as  its  Argenta  plant),  shall 
not  be  released  from  the  lien  hereof  unless  at  the  time  of  any  such  release 
there  shall  be  paid  to  the  Corporate  Trustee  in  consideration  thereof,  at 
least  the  sum  of  $250,000  in  cash,  and,  if  the  consideration  actually 
received  by  the  Company  upon  any  such  sale  of  the  Argenta  plant  shall 
be  less  than  the  sum  of  $250,000,  the  Company  shall  not  be  entitled  to  a 
release  of  said  plant  from  the  lien  of  this  Indenture  until  it  shall  have 
made  up  and  deposited  with  the  Trustee  the  necessary  balance  of  said 
sum  out  of  its  other  funds.  This  proviso,  however,  shall  have  no  applica 
tion  to  releases  requested  by  the  Company  of  any  specific  parcel  of  real 
estate  forming  a  part  of  said  Argenta  plant  of  the  Company,  but  not 
affecting  the  substantial  value  or  use  of  the  said  Argenta  plant. 

The  resolutions  and  certificates,  and  the  instruments  and  opinions 
hereinbefore  provided  for,  shall  be  full  authority  to  the  Trustees  for  mak¬ 
ing  any  such  release;  but  before  making  any  such  release  the  Trustees 


30 


may,  in  their  discretion,  and  shall,  if  requested  in  writing  so  to  do  by  the 
holders  of  not  less  than  five  per  cent,  in  amount  of  the  outstanding 
bonds  and  furnished  with  security  and  indemnity  satisfactory  to  them, 
cause  to  be  made  such  independent  investigation  as  they  may  see  fit, 
and,  in  that  event  may  decline  to  take  action  unless  satisfied  by  such 

f 

investigation  of  the  truth  and  accuracy  of  the  matters  so  investigated. 

i 

The  expense  of  any  such  investigation  shall  be  paid  by  the  Company,  or 
if  paid  by  the  Trustees,  shall  be  repaid  by  the  Company  upon  demand, 
with  interest  after  demand  at  the  rate  of  six  per  cent,  per  annum. 

Any  new  property  acquired  by  the  Company  by  exchange  or  pur¬ 
chase,  to  take  the  place  of  any  property  released  hereunder,  shall  forth¬ 
with  and  without  further  conveyance  become  subject  to  the  lien  of  and 
be  covered  by  this  Indenture;  but  if  requested  by  the  Trustees  the  Com¬ 
pany  shall  convey  the  same  to  the  Trustees  by  proper  deeds  upon  the 
trusts  and  for  the  purposes  of  this  Indenture. 

Section  3.  In  case  the  mortgaged  property  shall  be  in  the  posses¬ 
sion  of  a  receiver,  lawfully  appointed,  the  powers  hereinbefore  conferred 
upon  the  Company  with  respect  to  the  sale  or  other  disposition  of  prop¬ 
erty  covered  hereby  may  be  exercised  by  such  receiver  with  the  consent 
of  the  Trustees  but  not  otherwise ;  and  if  the  Trustees  shall  be  in  posses¬ 
sion  of  the  mortgaged  property  under  any  provision  of  this  Indenture, 
then  such  powers  may  be  exercised  by  the  Trustees  in  discretion. 

No  purchaser  in  good  faith  of  property  purporting  to  be  released 
hereunder  shall  be  bound  to  ascertain  the  authority  of  the  Trustee  to 
execute  the  release,  or  to  inquire  as  to  any  facts  required  by  the  pro¬ 
visions  hereof  for  the  exercise  of  such  authority;  nor  shall  any  purchaser 
of  machinery  or  equipment  be  under  obligation  to  ascertain  or  inquire 
into  the  occurrence  of  the  event  on  which  any  such  sale  is  hereby 
authorized. 


31 


ARTICLE  V. 

Application  op  Money  Received  by  the  Trustees. 

All  obligations  received  by  the  Trustees  under  the  provisions  of  Sec¬ 
tion  2  of  Article  IV  of  this  Indenture  shall  be  held  and  collected  by  the 
Corporate  Trustee,  which  shall,  however,  be  under  no  liability  or  account¬ 
ability  whatsoever  for  the  collection  thereof  (interest  as  received  thereon 
meanwhile  to  be  paid  over  to  the  Company,  not  being  then  in  default 
hereunder  to  the  knowledge  of  the  Trustees). 

All  moneys  received  by  the  Trustees  as  principal  of  such  obligations 
or  as  proceeds  of  released  property  or  of  property  taken  by  the  power 
of  eminent  domain  or  as  insurance  money  shall  be  held  by  the  Corporate 
Trustee  and  shall  be  paid  over  from  time  to  time  by  the  Corporate  Trustee 
to  or  upon  the  order  of  the  Treasurer  of  the  Company  to  reimburse  the 
Company  for  cash  expended  by  it  since  the  execution  and  delivery  of  this 
Indenture  (and  whether  prior  or  subsequent  to  the  receipt  of  such  money 
by  the  Trustees,  or  the  release  or  taking  of  property,  proceeds  of  which 
make  up  or  are  included  in  such  money)  (1)  for  the  construction,  pur¬ 
chase  or  acquisition  of  permanent  improvements,  extensions  or  additions 
to  its  property  such  as  might  have  been  made  the  basis  of  an  application 
for  additional  bonds  under  the  provisions  of  Section  4  of  Article  I  of  this 
Indenture,  or,  (2)  for  the  replacement  of  property  destroyed  by  fire 
(to  the  extent  that  insurance  moneys  arising  from  such  loss  are  in  the 
hands  of  the  Trustees).  Such  payments  shall  be  made  by  the  Corporate 
Trustee  upon  receipt  by  it  of : 

(A)  A  copy  of  a  resolution  certified  to  have  been  adopted  by  the 
Board  of  Directors  of  the  Company  stating  the  actual  cash  cost  to  the 
Company  of  the  permanent  improvements,  extensions  and  additions  (or 
replacements  of  property  destroyed  by  fire)  described  in  the  certificate 
next  hereinafter  mentioned  and  requesting  reimbursement  of  such  cash 
expenditures. 


32 


(B)  A  certificate  signed  by  tbe  President  or  a  Vice-President  of  the 
Company  and  by  an  Engineer  appointed  by  its  Board  of  Directors  and 
approved  by  the  Trustees  stating 

(a)  that  the  Company  has  made  certain  permanent  improvements, 
extensions  or  additions  to  its  property  (describing  the  same  with  rea¬ 
sonable  detail),  or  has  made  certain  replacements  of  property  destroyed 
by  fire  (describing  the  same  with  reasonable  detail)  and  that  the  same 
are  desirable  in  the  profitable  conduct  of  the  Company’s  business; 

( b )  that  the  Company  has  actually  expended  on  the  same  the  amount 
specified  in  the  resolution  last  above  mentioned  as  the  cash  cost  thereof, 
and  that  the  amount  so  expended  was  not,  in  the  signers’  opinion,  in 
excess  of  the  fair  value  to  the  Company  of  such  permanent  improvements, 
extensions  or  additions  or  of  such  replacements;  said  certificate  shall 
further  distinctly  specify  whether  any  of  such  expenditures,  and  if  so 
what  portion,  were  expended  to  replace  property  destroyed  by  fire. 

(c)  that  no  part  of  such  cash  cost  has  been  included  in  any  previous 
certificate  made  under  the  provisions  of  this  Article  V  or  of  Section  4  of 
Article  I  of  this  Indenture. 

( d )  that  the  Company  is  not,  to  the  knowledge  of  the  signers,  in 
default  in  any  of  the  terms,  covenants  or  conditions  of  this  Indenture. 

(C)  Such  instruments  of  conveyance,  assignment  and  transfer  as 
may  be  necessary  in  the  opinion  of  counsel  (who  may  be  of  counsel  to  the 
Company),  appointed  by  the  Board  of  Directors  of  the  Company  and 
approved  by  the  Trustees,  to  vest  in  the  Trustees  to  hold  as  part  of 
the  mortgaged  property  hereunder  all  the  right,  title  and  interest  of 
the  Company  in  and  to  such  permanent  improvements,  extensions  or 
additions  or  the  opinion  of  counsel  that  no  such  instruments  are  necessary 
for  such  purposes  and  also  the  opinion  of  such  counsel  that  the  Company 
has  absolute  title  to  such  permanent  improvements,  extensions  or  addi¬ 
tions  subject  to  no  lien  or  incumbrance  prior  to  the  lien  of  this  Inden¬ 
ture  except  taxes  for  the  then  current  year. 


33 


The  resolutions  and  certificates,  and  the  instruments  and  opinions 
hereinbefore  in  this  Article  provided  for,  shall  be  full  authority  to  the 
Trustees  for  the  payment  of  any  moneys  as  requested  therein;  but  before 
making  any  such  payment  the  Corporate  Trustee  may,  in  its  discretion, 
cause  to  be  made  such  independent  investigation  as  it  may  see  fit,  and  may 
decline  to  take  action  unless  satisfied  by  such  investigation  of  the  truth 
and  accuracy  of  the  matters  so  investigated.  The  expense  of  any  such 
investigation  shall  be  paid  by  the  Company,  or,  if  paid  by  the  Trustees, 
shall  be  repaid  by  the  Company  upon  demand,  with  interest  after  demand 
at  the  rate  of  six  per  cent,  per  annum. 

Any  such  moneys  in  the  hands  of  the  Corporate  Trustee,  and  not 
theretofore  paid  over  or  requested  to  be  paid  over  to  reimburse  the  Com¬ 
pany  as  aforesaid  shall,  on  the  election  and  in  accordance  with  the  request 
of  the  Company  evidenced  by  a  copy  of  a  resolution  certified  to  have  been 
adopted  by  its  Board  of  Directors,  be  applied  by  the  Corporate  Trustee 
to  the  purchase  of  bonds  issued  and  outstanding  hereunder  at  not  exceed¬ 
ing  their  redemption  price  or  to  the  redemption  of  bonds  under  and  in 
accordance  with  the  provisions  of  Article  III  of  this  Indenture. 

Before  making  any  purchase  of  bonds  the  Corporate  Trustee  shall 
by  notice  published  once  a  week  for  four  successive  weeks  in  one  daily 
newspaper  published  in  each  of  the  Cities  of  Chicago  and  New  York, 
advertise  for  written  proposals  to  sell  to  it  bonds;  and  the  Corporate 
Trustee  to  the  extent  of  the  funds  then  in  its  hands  and  requested  by  the 
Company  to  be  so  applied,  shall  purchase  the  bonds  so  offered  at  the 
lowest  price  asked  therefor,  and  reasonable  notice  shall  be  given  by  the 
Corporate  Trustee  to  the  owner  or  owners  of  the  bonds  whose  proposals 
may  be  accepted.  Should  there  be  two  or  more  proposals  at  the  same 
price  aggregating  more  than  the  amount  which  the  Corporate  Trustee 
has  available  for  investment  after  having  accepted  all  proposals  at  the 
lowest  price,  such  proposals  shall  be  accepted  ratably,  provided,  however, 
that  no  proposal  shall  be  accepted  by  the  Corporate  Trustee  at  prices 
in  excess  of  the  redemption  price;  and  provided  further  that  the  Corpo¬ 
rate  Trustee  shall  have  the  right  to  reject  any  or  all  proposals  in  whole 


34 


or  in  part,  if  it  can  at  the  time  of  opening  said  proposals  purchase  the 
requisite  amount  of  said  bonds  or  any  part  thereof  at  a  lower  price  than 
the  lowest  price  offered  by  the  said  proposals. 

In  the  event  that  the  Company  shall  permit  any  money  received 
under  the  terms  of  this  article  to  remain  in  the  hands  of  the  Corporate 
Trustee  for  more  than  two  years,  the  Corporate  Trustee  may  in  its  dis¬ 
cretion  purchase  bonds  as  herein  provided  without  request  by  the 
Company. 


ARTICLE  VI. 

Maintenance  and  Improvement  Fund. 

The  Company  covenants  and  agrees  that  it  will,  in  the  fiscal  year 
ending  upon  the  30tli  day  of  April,  1917,  and  in  each  fiscal  year  thereafter 
during  the  existence  of  this  trust,  set  aside,  as  a  Maintenance  and  Im¬ 
provement  Fund,  a  sum  equal  to  twelve  per  cent.  (12%)  of  its  gross 
earnings  derived  from  the  operation  of  the  mortgaged  property  in  said 
respective  fiscal  years,  and  will  also,  during  said  fiscal  year  ending  April 
30,  1917,  set  aside  for  said  purpose  a  like  proportion  of  its  earnings 
during  the  six  months’  period  ending  April  30,  1916,  so  far  as  such 
earnings  shall  not  have  been  so  expended  in  such  proportion  during 
said  six  months’  period.  One-half  of  the  amount  so  to  be  set  aside  shall, 
annually,  be  charged  to  and  included  in  the  operating  expenses  of  the 
Company  for  all  the  purposes  of  this  Indenture.  All  expenditures  made 
by  the  Company  during  each  of  said  years  for  repairs,  renewals,  mainte¬ 
nance  and  replacements,  shall,  at  the  end  of  each  month,  be  credited  to 
the  fund  established  as  aforesaid.  In  case  the  sums  so  credited  in  any 
fiscal  year  shall  not,  at  the  end  thereof,  have  amounted  in  the  aggre¬ 
gate  to  twelve  per  cent.  (12%)  of  the  gross  earnings  of  the  Company 
for  such  year,  the  Company  shall,  within  ninety  (90)  days  from  the 
expiration  of  such  fiscal  year,  deposit  in  cash  with  the  Corporate  Trustee, 
as  and  for  an  improvement  reserve,  a  sum  equal  to  the  excess  of  said 
twelve  per  cent,  (12%)  of  the  gross  earnings  for  such  year  over  and 


35 


above  the  amount  actually  expended  and  credited  by  the  Company  as 
aforesaid.  The  Company  shall,  within  said  ninety  (90)  days  render 
to  the  Corporate  Trustee  a  statement  of  its  gross  earnings  and  of  the 
amounts  expended  by  it  as  aforesaid  signed  by  its  President  or  Vice- 
President,  and  Treasurer  or  Assistant  Treasurer,  and  the  excess  of 
the  percentage  above  provided  for,  over  said  expenditures,  as  shown  by 
said  statement,  shall  bp  the  amount  to  be  deposited  with  the  Corporate 
Trustee.  Any  indebtedness  incurred  by  the  Company  prior  to  the  end 
of  the  fiscal  year  for  repairs,  renewals,  maintenance  and  replacements 
may  be  included  as  an  expenditure  during  said  fiscal  year,  provided  the 
work  covered  thereby  be  actually  done,  but  payments  of  such  indebted¬ 
ness  thereafter  made  shall  not,  in  that  event,  be  credited  to  said  fund 
upon  anv  statement  or  certificate  made  or  rendered  under  any  of  the 
provisions  of  this  Indenture. 

?  Provided,  however,  (1)  that  if  in  any  fiscal  year  the  Company  shall 
expend  and  set  aside  for  the  purposes  hereinbefore  in  this  Article  set 
forth  any  sum  in  excess  of  the  amount  herein  covenanted  to  be  so  expended 
or  set  aside,  the  amount  of  such  excess  shall  be  credited  to  the  Company 
on  account  of  its  covenant  with  respect  to  any  succeeding  year  or  years 
within  a  period  of  three  years  then  next  ensuing;  and  (2)  in  lieu  of 
deposit  of  cash  with  the  Corporate  Trustee,  the  Company  may  deliver 
to  the  Corporate  Trustee  a  statement  signed  by  its  President  or  a  Vice- 
President,  and  its  Treasurer  or  an  Assistant  Treasurer,  setting  forth 
*  that  the  Company  has  actually  expended  during  the  last  fiscal  year  an 
amount  of  cash,  to  be  therein  stated,  for  the  construction  or  acquisition 
of  permanent  improvements,  extensions  or  additions  to  or  about  its 
plants  or  property,  describing  the  same  in  reasonable  detail,  which  state¬ 
ment  shall  thereupon  be  accepted  pro  tanto  by  the  Corporate  Trustee 
as  the  equivalent  of  a  cash  payment  to  the  amount  so  set  forth. 

All  amounts  paid  to  the  Corporate  Trustee  under  the  provisions  of 
this  article  shall  be  held  by  the  Corporate  Trustee  as  a  separate  fund  not 
subject  to  the  provisions  of  Article  IV  or  of  Article  V  of  this  Indenture, 
and  shall  from  time  to  time  be  paid  over  by  the  Corporate  Trustee  to 


36 


the  Company  as  may  be  requested  and  directed  by  resolution  certified 
under  seal  of  the  Company  by  its  Secretary  or  an  Assistant  Secretary 
to  have  been  adopted  by  its  Board  of  Directors  to  reimburse  the  Com¬ 
pany  for  moneys  actually  expended  by  it,  subsequent  to  the  date  of  this 
Indenture,  for  the  construction  of  permanent  improvements,  extensions 
or  additions  to  or  about  its  plants  or  property,  or  for  any  amount  actually 
expended  by  it  during  the  fiscal  year  then  last  past  for  repairs,  renewals, 
maintenance  or  replacements  in  excess  of  the  amount  covenanted  by  it 
to  be  expended  or  set  aside  for  such  purposes  during  such  year. 

Provided,  however,  that  the  Company  hereby  covenants,  that 
no  bonds  shall  be  issued  under  any  of  the  provisions  of  this  Indenture, 
to  reimburse  the  Company  for  any  part  of  any  expenditures  which 
shall  have  been  reimbursed  to  it  at  any  time  by  the  Corporate  Trustee 
under  the  provisions  of  this  Article  YI  of  this  Indenture  or  which  shall 
have  been  reported  in  lieu  of  cash  to  the  Corporate  Trustee  under  the"' 
provisions  of  this  article. 

In  the  event  that  at  any  time  the  Board  of  Directors  of  the  Com¬ 
pany  deems  that  the  accumulation  of  cash  in  the  hands  of  the  Corporate 
Trustee  under  the  provisions  of  this  Article  VI  of  this  Indenture,  is  in 
excess  of  the  amount  then  reasonably  required  for  the  purposes  in  this 
Article  VI  specified,  the  Board  of  Directors  may,  by  resolution,  direct  the 
Trustee  to  apply  all  or  any  part  of  any  fund  then  held  by  it  under  the 
provisions  of  this  Article  VI  to  the  purchase  or  redemption  of  bonds 
then  outstanding  hereunder  in  accordance  with  the  provisions  of  Article 
V  of  this  Indenture. 

All  amounts  required  by  State  laws  or  by  any  public  service  com¬ 
mission  or  similar  body,  to  be  set  aside  from  earnings  or  surplus  for 
sinking  funds  or  reserves  for  depreciation  or  renewals,  shall  be  applied 
and  considered  as  a  part  of  the  fund  to  be  set  aside  under  the  provisions 
of  this  Article,  so  that  a  double  charge  shall  not  be  made  for  this  pur¬ 
pose. 


37 


ARTICLE  VII. 

Remedies  Upon  Default. 

Section  1.  If  default  shall  be  made  in  the  payment  of  the  principal 
of  or  any  interest  on  any  bond  hereby  secured,  and  such  default  shall 
continue  for  ninety  days,  or  if  default  shall  be  made  hereunder  by 
the  Company  in  the  observance  or  performance  of  any  other  of  the 
covenants,  agreements  or  conditions  on  its  part  in  this  Indenture 
contained  and  such  default  shall  continue  for  ninety  days  after 
written  notice  to  the  Company  by  the  Trustees  or  by  any  holder  of  the 
bonds  hereby  secured  and  then  outstanding,  then  (a)  upon  the  election 
of  the  Trustees,  or  (b)  upon  the  election  of  the  holders  of  twenty-five 
per  cent,  in  interest  of  the  bonds  hereby  secured  and  then  outstanding, 
evidenced  by  an  instrument  or  instruments  in  writing,  signed  by  them 
and  delivered  to  the  Trustees,  the  entire  principal  sum  secured  hereby 
and  the  interest  accrued  thereon  shall  become  and  be  immediately  due 
and  payable;  subject,  however,  to  the  right  of  a  majority  in  interest  of 
the  holders  of  the  bonds  then  outstanding  to  annul  such  election  and 
destroy  its  effects  or  to  waive  any  default  hereunder  at  any  time  before 
any  sale,  hereunder,  by  written  notice  to  the  Company  and  the  Trustees, 
if,  before  any  such  sale,  all  agreements  with  respect  to  which  default 
shall  have  been  made  shall  be  fully  performed,  and  all  arrears  of  interest 
upon  all  bonds  secured  hereby  and  the  principal  of  any  bonds  which  have 
matured  in  due  course  by  their  terms  and  the  reasonable  charges  and 
expenses  of  the  Trustees,  their  agents  and  attorneys  and  all  other  indebt¬ 
edness  secured  hereby,  except  the  principal  of  bonds  whose  date  of 
maturity  as  specified  on  their  face  has  not  yet  arrived  and  interest  accrued 
since  the  last  interest  day,  shall  be  paid,  or  the  amount  thereof  shall  be 
paid  to  the  Trustees  for  the  benefit  of  those  entitled  thereto. 

Section  2.  If  (1)  default  shall  be  made  in  the  payment  of  any 
interest  on  any  bond  hereby  secured,  and  such  default  shall  continue 
for  ninety  days,  or  (2)  default  shall  be  made  in  the  payment  of  any 


38 


principal  hereby  secured,  or  (3)  default  shall  be  made  hereunder  by 
the  Company  in  the  observance  or  performance  of  any  other  of  the 
covenants,  agreements  or  conditions  on  its  part  in  this  Indenture  con¬ 
tained,  and  such  default  shall  continue  for  ninety  days  after  written 
notice  to  the  Company  by  the  Trustees  or  by  any  holder  of  the 
bonds  hereby  secured  and  then  outstanding,  the  Company,  upon 
demand  of  the  Trustees,  shall  forthwith  surrender  to  the  Trustees 
the  actual  possession  of,  and  it  shall  be  lawful  for  the  Trustees,  by 
such  officer  or  agent  as  they  may  appoint,  to  take  possession  of  all  the 
property  hereby  conveyed  or  intended  to  be  (with  the  books,  papers  and 
accounts  of  the  Company),  and  to  hold,  operate  and  manage  the  same, 
and  from  time  to  time  make  all  needful  repairs,  and  such  alterations, 
additions,  advances  and  improvements  as  to  it  shall  seem  wise;  and  to 
receive  the  rents,  income,  issues  and  profits  thereof,  and  out  of  the  same 
to  pay  all  proper  costs  and  expenses  of  so  taking,  holding  and  managing 
the  same,  including  reasonable  compensation  to  the  Trustees,  their  agents 
and  counsel,  and  any  charges  of  the  Trustees,  and  any  taxes  and 
assessments  and  other  charges  prior  to  the  lien  of  these  presents  which 
the  Trustees  may  deem  it  wise  to  pay,  and  all  expenses  of  such  repairs, 
alterations,  additions  and  improvements,  and  to  apply  the  remainder 
of  the  moneys  so  received  by  them,  first,  to  the  payment  of  the  interest 
instalments,  which  are  due  and  unpaid,  in  the  order  of  their  maturity, 
with  interest  at  six  per  cent,  after  maturity  (save  and  except  as  other¬ 
wise  provided  with  regard  to  extended  and  pledged  coupons  in  Section 
2  of  Article  II  of  this  Indenture)  ;  and  thereafter,  if  the  principal  of 
said  bonds  is  due,  to  the  payment  of  said  principal  and  accrued  interest 
thereon  pro  rata  without  any  preference  or  priority  whatever.  Whenever 
all  that  is  due  upon  such  interest  instalments  and  upon  the  principal  of 
such  bonds,  and  under  any  of  the  terms  of  this  Indenture  shall  have  been 
paid  and  all  defaults  made  good,  the  Trustees  shall  surrender  possession 
to  the  Company,  its  successors  or  assigns.  The  same  right  of  entry,  how¬ 
ever,  shall  exist  upon  any  subsequent  default. 


39 


Section  3.  If  (1)  default  shall  be  made  in  the  payment  of  any 
interest  on  any  bond  hereby  secured,  and  such  default  shall  continue 
for  ninety  days,  or  (2)  default  shall  be  made  in  the  payment  of  any 
principal  hereby  secured,  or  (3)  default  shall  be  made  hereunder  by  the 
Company  in  the  observance  or  performance  of  any  other  of  the 
covenants,  agreements  or  conditions  on  its  part  in  this  Indenture 
contained,  and  such  default  shall  continue  for  ninety  days  after 
written  notice  to  the  Company  by  the  Trustees  or  by  any  holder  of  the 
bonds  hereby  secured  and  then  outstanding,  it  shall  be  lawful  for  the 
Trustees,  by  such  officer  or  agent  as  they  may  appoint,  with  or  without 
entry,  to  sell  all  the  property  and  appurtenances  hereby  conveyed  or 
intended  to  be,  or  which  may  be  covered  hereby  or  in  any  manner  may 
be  subject  to  this  Indenture,  as  an  entirety,  or  in  such  parcels  as  the 
holders  of  a  majority  in  amount  of  the  bonds  secured  hereby  shall,  in  writ¬ 
ing,  request,  or  in  the  absence  of  such  request,  as  the  Trustees  may  deter¬ 
mine,  at  public  auction,  at  some  convenient  place  in  the  City  of  Little 
Rock,  Arkansas,  having  first  given  notice  of  such  sale  by  publication  in 
at  least .  one  daily  newspaper  published  in  the  City  of  Little  Rock, 
Arkansas,  at  least  once  a  week  for  four  successive  weeks  next  preceding 
such  sale,  and  by  like  publication  in  at  least  one  daily  newspaper  pub¬ 
lished  in  each  of  the  cities  of  Chicago  and  New  York,  and  any  other  notice 
which  may  be  required  by  law,  and  from  time  to  time  to  adjourn  such  sale 
in  their  discretion  by  announcement  at  the  time  and  place  appointed  for 
such  sale  or  for  such  adjourned  sale  or  sales  without  further  notice  except 
such  as  may  be  required  by  law,  and  upon  such  sale  to  make  and  deliver 
to  the  purchaser  or  purchasers  a  good  and  sufficient  deed  or  deeds  for  the 
same,  which  sale,  as  likewise  any  sale  made  under  this  Indenture  by  virtue 
of  any  judicial  proceedings,  shall  be  a  perpetual  bar,  both  in  law  and  in 
equity,  against  the  Company,  and  all  persons  and  corporations  lawfully 
claiming  or  to  claim  by,  through  or  under  it. 

Section  4.  In  case  of  the  breach  of  any  of  the  covenants  or  con¬ 
ditions  of  this  Indenture,  the  Trustees  shall  have  the  right  and  power  to 


40 


take  appropriate  judicial  proceedings  for  the  protection  and  enforce¬ 
ment  of  their  rights  and  the  rights  of  the  bondholders  hereunder.  If  (1) 
default  shall  be  made  in  the  payment  of  any  interest  on  any  bond  hereby 
secured  and  such  default  shall  continue  for  ninety  days,  or  (2)  default 
shall  be  made  in  the  payment  of  any  principal  hereby  secured,  or  (3) 
default  shall  be  made  hereunder  by  the  Company  in  the  observance  or 
performance  of  any  other  of  the  covenants,  agreements  or  conditions  on 
its  part  in  this  Indenture  contained,  and  such  default  shall  continue  for 
ninety  days  after  written  notice  to  the  Company  by  the  Trustees  or  by 
the  holder  of  any  of  the  bonds  hereby  secured  and  then  outstanding,  the 
Trustees  may,  either  after  entry,  as  hereinbefore  provided,  or  other  entry, 
or  without  entry,  proceed  by  suit  or  suits  at  law  or  in  equity  or  by 
any  other  appropriate  remedy,  to  enforce  payment  of  the  bonds  hereby 
secured  and  to  foreclose  this  mortgage  and  to  sell  the  mortgaged 
premises  and  all  property  covered  by  this  Indenture  under  the  judg¬ 
ment  or  decree  of  a  court  or  courts  of  competent  jurisdiction,  and 
it  shall  be  obligatory  upon  the  Trustees  to  take  action  either  by  such 
proceedings  or  by  the  exercise  of  their  powers  with  respect  to  entry  or 
sale  as  they  may  determine,  upon  being  requested  so  to  do  by  the  holders 
of  twenty-five  per  cent,  in  interest  of  the  bonds  hereby  secured  and  then 
outstanding,  and  upon  being  indemnified  as  hereinafter  provided,  in  any 
case  of  default  which  shall  occur  and  shall  have  continued  as  herein 
before  specified  in  this  Section.  No  bondholder  or  bondholders  shall  be 
entitled  to  take  any  proceedings  hereunder  or  upon  or  in  respect  of  any 
of  the  bonds  and  coupons  hereby  secured  except  in  case  of  refusal  or 
neglect  of  the  Trustees  to  act  after  such  continued  breach  and  such  request 
and  tender  of  indemnity  as  aforesaid. 

No  remedy  by  the  terms  of  this  Indenture  conferred  upon  or  reserved 

to  the  Trustees  or  to  the  bondholders  is  intended  to  be  exclusive  of  anv 

«/ 

other  remedy,  but  each  and  every  such  remedy  shall  be  cumulative  and 
shall  be  in  addition  to  any  other  remedy  given  hereunder  or  now  or  here¬ 
after  existing  at  law  or  in  equity  or  by  statute. 


41 


Section  5.  Anything  in  this  Indenture  to  the  contrary  notwith¬ 
standing,  the  holders  of  a  majority  in  amount  of  the  bonds  hereby  secured 
and  then  outstanding,  from  time  to  time,  shall  have  the  right,  by 
an  instrument  in  writing  executed  and  delivered  to  the  Trustees,  to  direct 
the  method  and  place  of  conducting  all  proceedings  to  be  taken  for  any 
sale  of  the  mortgaged  property,  or  for  the  foreclosure  of  this  Indenture, 
or  for  the  appointment  of  a  receiver,  or  any  other  proceedings  hereunder; 
provided  that  such  direction  shall  not  be  otherwise  than  in  accordance 
with  the  provisions  hereof. 

Section  6.  In  case  of  a  default  hereunder  of  the  character  specified 
in  Section  2  of  this  Article  and  its  continuance  for  the  period,  if  any, 
therein  provided,  and  upon  the  filing  of  a  bill  in  equity,  or  other  com¬ 
mencement  of  judicial  proceedings  to  enforce  the  rights  of  the  Trustees 
and  of  the  bondholders,  the  Trustees,  as  a  matter  of  right,  shall  be  entitled 
to  the  appointment  of  a  receiver  of  the  property  hereby  mortgaged, 
and  of  the  income,  rents,  issues  and  profits  thereof,  pending  such  proceed¬ 
ings,  with  such  powers  as  the  court  making  such  appointment  shall 
confer. 

Section  7.  Upon  any  sale  being  made  either  under  the  power  of  sale 
hereby  given  or  under  judgment  or  decree  in  any  judicial  proceedings 
for  foreclosure  or  otherwise  for  the  enforcement  of  this  Indenture,  the 
principal  of  all  bonds  then  outstanding  and  secured  hereby,  if  not  previ¬ 
ously  due,  shall  at  once  become  and  be  due  and  payable. 

Section  8.  Upon  any  such  sale,  whether  made  under  the  power  of 
sale  hereby  given  or  under  judgment  or  decree  of  court  or  otherwise,  any 
bondholder  or  bondholders  or  the  Trustees  may  bid  for  and  purchase  the 
mortgaged  property,  and  upon  compliance  with  the  terms  of  sale,  may 
hold,  retain  and  possess  and  dispose  of  such  property  in  their  own 
absolute  right  without  further  accountability ;  and  any  purchaser  at  any 
such  sale  may,  in  paying  purchase  money,  turn  in  any  of  said  bonds  and 
coupons  hereby  secured  in  lieu  of  cash  to  the  amount  which  shall,  upon 


42 


distribution  of  the  net  proceeds  of  such  sale,  be  payable  thereon,  subject, 
however,  to  the  provisions  with  respect  to  extended  and  pledged  coupons 
contained  in  Section  2  of  Article  II  of  this  Indenture.  Said  bonds  and 
coupons,  in  case  the  amount  so  payable  thereon  shall  be  less  than  the 
amount  due  thereon,  shall  be  returned  to  the  holders  thereof  after  being 
properly  stamped  to  show  partial  payment. 

The  receipt  of  the  Trustees  or  of  the  officer  making  a  sale  under 
judicial  proceedings  shall  be  a  sufficient  discharge  to  the  purchaser  or 
purchasers  at  any  sale  for  his  or  their  purchase  money,  and  such  pur¬ 
chaser  or  purchasers,  his  or  their  assigns  or  personal  representatives, 
shall  not,  after  paying  such  purchase  money  and  receiving  such  receipt 
of  the  Trustees  or  of  such  officer  therefor,  be  obliged  to  see  to  the  applica¬ 
tion  of  such  purchase  money,  or  be  in  anywise  answerable  for  any  loss, 
misapplication  or  non-application  thereof. 

Section  9.  The  proceeds  of  any  such  sale,  whether  made  under  the 
power  of  sale  hereby  given  or  under  judgment  or  decree  of  Court  or 
otherwise,  together  with  any  other  sums  which  may  then  be  held  by  the 
Corporate  Trustee  under  any  of  the  provisions  of  this  Indenture  as  part 
of  the  trust  estate,  or  the  proceeds  thereof,  shall  be  applied  as  follows: 

First:  To  the  payment  of  all  taxes,  assessments  or  liens  prior  to 
the  lien  of  this  Indenture,  except  those  subject  to  which  such  sale  shall 
have  been  made,  and  of  all  costs  and  expenses  of  such  sale,  including  a 
reasonable  compensation  to  the  Trustees,  their  agents  and  attorneys,  and 
of  all  other  sums  payable  to  the  Trustees  hereunder  by  reason  of  any 
expenses,  liabilities  or  advances  made  by  either  of  them. 

Second:  To  the  payment  of  the  whole  amount  then  owing  and 
unpaid  upon  the  bonds  hereby  secured  for  principal  and  interest,  with 
interest  on  the  overdue  instalments  of  interest,  at  the  same  rate  borne 
by  the  principal  of  the  said  bonds  respectively  according  to  their  terms, 
and  in  case  such  proceeds  shall  be  insufficient  to  pay  in  full  the  whole 
amount  so  due  and  unpaid,  then  to  the  payment  of  such  principal  and 
interest  ratably,  without  preference  or  priority  of  principal  over  interest, 


43 


or  of  interest  over  principal,  or  of  any  instalment  of  interest  over  any 
other  instalment  of  interest  ( save  and  except,  however,  as  otherwise  pro¬ 
vided  with  regard  to  extended  and  pledged  coupons  in  Section  2  of  Article 
II  of  this  Indenture). 

Third:  Any  surplus  then  remaining  to  the  Company,  its  successors 
or  assigns,  or  to  whosoever  may  be  lawfully  entitled  to  receive  the  same. 

Section  10.  In  case  of  a  default  on  its  part,  as  aforesaid,  neither 
the  Company  nor  any  one  claiming  through  or  under  it  shall  or  will 
set  up,  claim  or  seek  to  take  advantage  of  any  appraisement,  valua¬ 
tion,  stay,  extension  or  redemption  laws  now  or  hereafter  in  force  in  any 
locality  where  any  property  subject  to  the  lien  hereof  may  be  situated, 
in  order  to  prevent  or  hinder  the  enforcement  or  foreclosure  of  this 
Indenture,  or  the  absolute  sale  of  the  property  hereby  conveyed,  or  the 
final  and  absolute  putting  into  possession  thereof,  immediately  after 
such  sale,  of  the  purchaser  or  purchasers  thereat,  and  the  Company,  for 
itself  and  all  who  may  claim  through  or  under  it  hereby  waives  the 
benefit  of  all  such  laws,  and  further  waives  any  and  all  right  to  have 
the  estates  comprised  id  the  security  intended  to  be  created  hereby 
marshaled  upon  any  foreclosure  of  the  lien  hereof  and  agrees  that  the 
Trustees  or  any  court  having  jurisdiction  to  foreclose  such  lien  may  sell 
the  mortgaged  property  as  an  entirety. 

Section  11.  No  waiver  of  any  default  hereunder,  whether  by  the 
Trustees  or  the  bondholders,  shall  extend  to  or  shall  affect  any  subse¬ 
quent  default  or  shall  impair  any  rights  or  remedies  consequent  thereon. 

Section  12.  In  case  the  Trustees  shall  have  proceeded  to  enforce 
any  right  under  this  Indenture  by  foreclosure,  entry  or  otherwise,  and 
such  proceedings  shall  have  been  discontinued  or  abandoned  for  any 
reason,  or  shall  have  been  determined  adversely  to  the  Trustees,  then  and 
in  every  such  case  the  Company  and  the  Trustees  shall  be  restored  to 
their  former  positions  and  rights  hereunder  with  respect  to  the  mort- 


44 


gaged  property,  and  all  rights,  remedies  and  powers  of  the  Trustees 
shall  continue  as  if  no  such  proceedings  had  been  taken. 

Section  13.  No  delay  or  omission  of  the  Trustees,  or  of  any  holders 
of  bonds  hereby  secured,  to  exercise  any  right  or  power  accruing  upon 
any  default  shall  impair  any  such  right  or  power  or  shall  be  construed 
to  be  a  waiver  of  any  such  default,  or  acquiescence  therein;  and  every 
power  and  remedy  given  by  this  Indenture  to  the  Trustees,  or  to  the  bond¬ 
holders,  may  be  exercised,  from  time  to  time  and  as  often  as  may  be 
deemed  expedient  by  the  Trustees,  or  by  the  bondholders. 

ARTICLE  VIII. 

Evidence  of  Rights  of  Bondholders. 

Any  request  or  other  instrument,  which  this  Indenture  may  require 
or  permit  to  be  signed  and  executed  by  the  bondholders,  may  be  in  any 
number  of  concurrent  instruments  of  similar  tenor,  and  may  be  signed 
or  executed  by  such  bondholders  in  person  or  by  attorney  appointed  in 
writing.  Proof  of  the  execution  of  any  such  request  or  other  instrument, 
or  of  a  writing  appointing  any  such  agent,  or  of  the  holding  by  any  person 
of  the  bonds  or  coupons  appertaining  thereto,  shall  be  sufficient  for  any 
purpose  of  this  Indenture  if  made  in  the  following  manner: 

(a)  The  fact  and  date  of  the  execution  by  any  person  of 
such  request  or  other  instrument  or  writing  may  be  proved  by 
the  certificate  of  any  notary  public,  or  other  officer  authorized 
to  take  acknowledgments  of  deeds  to  be  recorded  in  any 
State,  that  the  person  signing  such  request  or  other  instrument 
acknowledged  to  him  the  execution  thereof,  or  by  an  affidavit 
of  a  witness  of  such  execution ; 

(b)  The  amount  of  bonds  transferable  by  delivery  held  by 
any  person  executing  such  request  or  other  instrument  as  a 
bondholder,  and  the  issue  numbers  thereof,  held  by  such  person, 
and  the  date  of  his  holding  the  same,  may  be  proven  by  a  certifi- 


45 


cate  executed  by  any  trust  company,  bank,  bankers  or  other 
depositary  wheresoever  situated,  if  such  certificate  shall  be 
deemed  by  the  Trustees  to  be  satisfactory,  showing  that  at  the 
date  therein  mentioned  such  person  had  on  deposit  Avith  such 
depositary,  the  bonds  described  in  such  certificate.  The  Trus¬ 
tees  may  nevertheless  in  their  discretion  require  further  proof 
in  cases  where  they  deem  further  proof  desirable.  The  owner¬ 
ship  of  registered  bonds  shall  be  proved  by  the  registry  books  as 
hereinbefore  provided. 

The  Trustees  shall  not  be  bound  to  recognize  any  person  as  a  bond¬ 
holder  unless  and  until  his  title  to  the  bonds  held  by  him  is  proved  in 
the  manner  in  this  Article  VIII  provided. 

ARTICLE  IX. 

Defeasance. 

If  the  Company,  its  successors  or  assigns,  shall  pay  or  cause  to  be 
paid  unto  the  holders  of  said  bonds  and  coupons,  the  principal  and 
interest  to  become  due  thereon  at  the  times  and  in  the  manner  stipulated 
therein,  and  shall  keep,  perform  and  observe  all  and  singular  the  cove¬ 
nants  and  promises  in  said  bonds,  and  in  this  Indenture  expressed  as 
to  be  kept,  performed  and  observed  by  it  or  on  its  part,  then  these  pres¬ 
ents  and  the  estate  and  the  rights  hereby  granted  shall  cease,  determine 
and  be  void,  and  thereupon  the  Trustees  shall,  upon  request  of  the  Com¬ 
pany,  cancel  and  discharge  the  lien  of  this  Indenture,  and  execute  and 
deliver  to  the  Company  such  deeds  as  shall  be  requisite  to  satisfy  the 
lien  hereof,  and  reconvey  to  the  Company  the  estate  and  title  hereby  con¬ 
veyed,  and  assign  and  deliver  to  the  Company  any  property  subject  to 
the  lien  of  this  Indenture  AAdiich  may  then  be  in  their  possession  or  the 
possession  of  either  of  them.  Bonds  for  the  payment  or  redemption  of 
which  money  shall  have  been  set  apart  by  or  paid  to  the  Trustees  shall 
be  deemed  to  be  paid  within  the  meaning  of  this  Article. 


46 


ARTICLE  X. 

Immunity  of  Officers,  Stockholders  and  Directors. 

No  recourse  under  or  upon  any  obligation,  covenant  or  agreement 
contained  in  this  Indenture,  or  in  any  bond  or  coupon  hereby  secured, 
or  under  any  judgment  obtained  against  the  Company,  or  by  the  enforce¬ 
ment  of  any  assessment  or  by  any  legal  or  equitable  proceeding  by  virtue 
of  any  constitution  or  statute  or  otherwise  or  under  any  circumstances, 
under  or  independent  of  this  Indenture  shall  be  had  against  any  stock¬ 
holder,  officer  or  director  of  the  Company,  or  of  any  successor  corpora¬ 
tion,  either  directly  or  through  the  Company,  or  otherwise,  for  the  pay¬ 
ment  for  or  to  the  Company  or  any  receiver  thereof,  or  for  or  to  the 
holder  of  any  bond  or  coupon  issued  or  secured  hereunder  or  otherwise, 
of  any  sum  that  may  be  due  and  unpaid  by  the  Company  upon  any  such 
bond  or  coupon,  and  any  and  all  personal  liability  of  every  name  and 
nature,  whether  at  common  law  or  in  equity,  or  by  statute  or  by  consti¬ 
tution  or  otherwise,  of  any  such  stockholder,  officer  or  director  to  re¬ 
spond  by  reason  of  the  non-payment  of  any  stock  or  any  act  of  omission 
or  commission  on  his  part  or  otherwise,  for  the  payment  for  or  to  the 
Company  or  any  receiver  thereof,  or  for  or  to  the  holder  of  any  bond  or 
coupon  issued  or  secured  hereunder  or  otherwise,  of  any  sum  that  may 
remain  due  and  unpaid  upon  the  bonds  and  coupons  hereby  secured  or 
any  of  them,  is  hereby  expressly  waived  and  released  as  a  condition  of 
and  consideration  for  the  execution  of  this  Indenture  and  the  issue  of 
such  bonds  and  coupons. 


ARTICLE  XI. 

Consolidations,  Mergers,  Sales  and  Leases. 

Section  1.  Nothing  in  this  Indenture  contained  shall  prevent  any 
consolidation  or  merger  of  the  Company  with  or  into,  or  any  conveyance, 
transfer  or  lease,  subject  to  this  Indenture,  of  all  the  mortgaged  property, 
as  an  entirety,  to  any  corporation  lawfully  entitled  to  acquire  or  lease 


47 


and  operate  the  same;  provided,  however,  and  the  Company  covenants 
and  agrees,  that  such  consolidation,  merger,  conveyance,  transfer  or 
lease  shall  be  upon  such  terms  as  in  no  respect  to  impair  the  lien  of  this 
Indenture,  or  any  of  the  rights  or  powers  of  the  Trustees  or  the  bond¬ 
holders  hereunder;  and  provided,  further,  that  any  such  lease  shall  be 
made  expressly  subject  to  immediate  termination  by  the  Trustees  at  any 
time  during  the  continuance  of  a  default  hereunder  and  also  by  the  pur¬ 
chaser  of  the  property  so  leased  at  any  sale  thereof  hereunder,  whether 
such  sale  be  made  under  the  power  of  sale  hereby  conferred  or  under 
judicial  proceedings,  and  that,  upon  any  such  consolidation,  merger, 
conveyance  or  transfer,  the  due  and  punctual  payment  of  the  principal 
and  interest  of  all  of  said  bonds  according  to  their  tenor,  and  the  due  and 
punctual  performance  and  observance  of  all  the  terms,  covenants  and 
conditions  of  this  Indenture  to  be  kept  or  performed  by  the  Company, 
shall  be  assumed  by  the  corporation  formed  by  such  consolidation  or  into 
which  such  merger  shall  have  been  made,  or  acquiring  all  the  property 
subject  to  this  Indenture  as  an  entirety,  as  aforesaid. 

Section  2.  In  case  the  Company,  pursuant  to  Section  1  of  this 
Article  XI,  shall  be  consolidated  with  or  merged  into  any  other  corpo¬ 
ration,  or  shall  convey  or  transfer,  subject  to  the  lien  of  this  Indenture, 
all  the  mortgaged  property,  as  an  entirety,  the  corporation  resulting 
from  such  consolidation,  or  into  which  the  Company  shall  have  been 
merged,  or  which  shall  have  received  a  conveyance  or  transfer,  as  afore¬ 
said  (such  corporation  being  hereinafter  called  the  successor  corpora¬ 
tion) — upon  executing  and  causing  to  be  recorded  an  Indenture  with  the 
Trustees,  satisfactory  to  the  Trustees,  whereby  the  successor  corporation 
shall  assume  and  agree  to  pay  the  principal  and  interest  of  the  bonds 
issued  hereunder  and  secured  hereby  in  accordance  with  the  provisions 
of  said  bonds  and  coupons  and  this  Indenture,  and  shall  agree  to  per¬ 
form  and  fulfill  all  the  terms,  covenants  and  conditions  of  this  Indenture 
binding  upon  the  Company — shall  succeed  to  and  be  substituted  for  the 
Company,  with  the  same  effect  as  if  it  had  been  named  herein  as  the 


48 


mortgagor  company,  and  the  successor  corporation  thereupon  may  cause 
to  be  signed,  issued  and  delivered,  either  in  its  own  name  or  in  the  name 
of  Arkansaw  Water  Company,  any  or  all  of  such  bonds  which  shall  not 
theretofore  have  been  signed  by  the  Company  and  certified  by  the  Cor¬ 
porate  Trustee,  and  upon  the  order  of  the  successor  corporation  in  lieu 
of  the  Company,  and  subject  to  all  the  terms,  conditions  and  restrictions 
in  this  Indenture  prescribed,  touching  the  certification  and  issuance  of 
bonds,  the  Corporate  Trustee  shall  certify  and  deliver  any  of  such  bonds 
which  shall  have  been  previously  signed  and  delivered  by  the  officers  of 
the  Company  to  the  Corporate  Trustee  for  certification,  and  any  of  such 
bonds  which  the  successor  corporation  shall  thereafter,  in  accordance  with 
the  provisions  of  this  Indenture,  cause  to  be  signed  and  delivered  to  the 
Corporate  Trustee  for  such  purpose.  All  the  bonds  so  issued  shall  in  all 
respects  have  the  same  legal  rank  and  security  as  the  bonds  theretofore 
or  thereafter  issued  in  accordance  with  the  terms  of  this  Indenture  as 
though  all  of  said  bonds  had  been  issued  at  the  date  of  the  execution 
hereof. 

Provided ,  however ,  that  as  a  condition  precedent  to  the  execution 
by  the  successor  corporation  and  the  certification  by  the  Corporate  Trus¬ 
tee  of  any  such  additional  bonds  in  respect  of  the  making  by  the  suc¬ 
cessor  corporation  of  any  permanent  improvements,  extensions  or  addi¬ 
tions  to  or  about  its  plant  and  property,  the  Indenture  with  the  Trustees 
to  be  executed  and  caused  to  be  recorded  by  the  successor  corporation  as 
in  this  Article  XI  provided,  shall  contain  a  conveyance  or  transfer  and 
mortgage  in  terms  sufficient  to  include  such  permanent  improvements, 
extensions  and  additions;  and  provided ,  further }  that  the  lien  created 
thereby  shall  have  similar  force,  effect  and  standing  as  the  lien  of  this 
Indenture  would  have  if  the  Company  should  not  be  consolidated  with 
or  merged  into  such  other  corporation  or  should  not  convey  or  transfer, 
subject  to  this  Indenture,  all  the  property  subject  to  this  Indenture  as 
an  entirety,  as  aforesaid,  to  the  successor  corporation,  and  should  itself 
make  such  permanent  improvements,  extensions  and  additions,  and 


49 


request  the  certification  and  delivery  of  bonds  under  the  provisions  of 
this  Indenture  in  respect  thereof. 

The  Trustees  may  receive  the  certificate  of  any  counsel  (who  may 
be  of  counsel  to  the  Company)  appointed  by  the  Board  of  Directors  of 
the  Company  and  approved  by  the  Trustees,  as  conclusive  evidence  that 
any  such  indenture  complies  with  the  foregoing  conditions  and  provisions 
of  this  section. 

Section  3.  In  case  the  Company,  pursuant  to  Section  1  of  this 
Article  XI,  shall  be  consolidated  with  or  merged  into  any  other  corpora¬ 
tion,  or  shall  convey  or  transfer,  subject  to  this  Indenture,  all  the 
mortgaged  property  as  an  entirety,  as  aforesaid,  neither  this  Indenture 
nor  the  indenture  with  the  Trustees  to  be  executed  and  caused  to  be 
recorded  by  the  successor  corporation,  as  in  Section  2  of  this  Article  XI 
provided,  shall  become  or  be  a  lien  upon  any  of  the  properties  or  fran¬ 
chises  of  the  successor  corporation  except  those  acquired  by  it  from  the 
Company,  and  permanent  improvements,  extensions  and  additions  appur¬ 
tenant  thereto,  and  the  permanent  improvements,  extensions  and 
additions  to  or  about  the  plant  and  property  of  the  successor  corpora¬ 
tion,  made  and  used  by  it  as  the  basis  for  the  issue  of  additional  bonds 
under  this  Indenture,  as  herein  provided,  and  such  franchises,  repairs 
and  additional  property  as  may  be  acquired  by  the  successor  corporation 
in  pursuance  of  the  covenants  herein  contained  to  maintain,  preserve  and 
renew  the  franchises  covered  by  this  Indenture  and  to  keep  and  main¬ 
tain  the  property  covered  by  this  Indenture  in  thorough  repair,  working 
order  and  condition,  or  in  pursuance  of  some  other  covenant  or  agree¬ 
ment  hereof  to  be  kept  or  performed  by  the  Company;  but  in  case  of 
any  such  merger  the  accounts  of  the  merged  Company  shall  be  so  kept 
that  the  earnings  of  the  mortgaged  properties  can  be  at  all  times  dis¬ 
tinguished  and  all  the  covenants  herein  contained  affecting  the  mort¬ 
gaged  property  be  fully  performed. 

Section  4.  The  word  “Company”  wherever  herein  contained  shall 
include  the  successor  corporation,  and  any  order,  certificate  or  resol u- 


50 


tions  of  the  Board  of  Directors  or  officers  of  the  Company  provided  for 
in  this  Indenture  may  be  made  by  like  officials  of  the  successor 
corporation. 

* 

Section  5.  At  any  time  prior  to  the  exercise  of  any  power  by  this 
Article  XI  reserved  to  the  Company  or  a  purchasing  or  successor  cor¬ 
poration,  the  Company  may  surrender  any  power  so  reserved  to  the  Com¬ 
pany  or  to  such  purchasing  or  successor  corporation  by  delivering  to 
the  Trustees  an  instrument  in  writing  executed  by  its  President  or  a 
Vice-President  under  its  corporate  seal  attested  by  its  Secretary  or 
Assistant  Secretary,  accompanied  by  the  affidavit  of  its  Secretary  or 
Assistant  Secretary  that  the  execution  of  such  instrument  was  author¬ 
ized  by  the  vote  of  two-thirds  of  the  entire  Board  of  Directors  of  the 
Company  given  at  a  meeting  duly  called  and  held,  and  thereupon  the 
power  so  surrendered  shall  cease. 

ARTICLE  XII. 

Concerning  the  Trustees. 

The  Trustees  accept  the  trusts  hereunder  and  agree  to  perform  the 
same  upon  the  terms  and  conditions  hereof,  including  the  following : 

Section  1.  The  Trustees  shall  not  be  required  to  take  notice  of  any 
default  hereunder  unless  specifically  notified  in  writing  of  such  de¬ 
fault  by  a  holder  of  bonds  then  outstanding  hereunder,  and  until  so 
notified,  the  Trustees  may  assume  that  no  default  has  happened.  The 
Trustees  shall  not  be  under  any  obligation  to  take  any  action  in 
respect  of  any  default  or  otherwise,  nor  towards  the  execution  or  enforce¬ 
ment  of  any  of  the  trusts  hereby  created,  nor  to  institute,  appear  in 
or  defend  any  suit  or  other  proceeding  in  connection  therewith,  unless 
requested  in  writing  so  to  do  by  the  holders  of  twenty-five  per  cent  in 
amount  of  the  bonds  then  outstanding,  and  if  in  their  opinion  such 
action  may  tend  to  involve  them  in  expense  or  liability,  unless  fur¬ 
nished  from  time  to  time  as  they  may  require  with  security  and  indem- 


51 


nity  satisfactory  to  them;  blit  this  provision  shall  not  affect  any 
discretionary  power  herein  given  to  the  Trustees.  For  acting  upon  or 
in  accordance  with  any  notice,  request,  consent,  certificate,  bond,  coupon 
or  other  document  or  paper  believed  by  them  to  be  genuine  and  to  have 
been  signed  or  presented  by  the  proper  person,  or  duly  authorized  or 
properly  made,  the  Trustees  shall  not  be  liable  to  anybody.  They  may, 
however,  in  their  discretion,  require  the  production  of  any  bond  or  bonds 
or  other  and  further  proof  of  the  ownership  thereof.  Any  request,  con¬ 
sent  or  vote  of  the  owner  of  any  bond  shall  bind  all  future  owners  of  the 
same  instrument  in  respect  of  anything  done  or  suffered  by  the  Trustees 
in  pursuance  thereof. 

The  recitals  and  statements  herein  and  in  said  bonds  and  coupons 
contained  shall  not  be  considered  as  made  by  or  as  imposing  any  obliga¬ 
tion  or  liability  upon  the  Trustees.  The  Trustees  make  no  repre¬ 
sentation  as  to  the  validity  of  this  Indenture,  or  of  any  bonds  or  coupons 
issued  hereunder,  nor  as  to  the  security  hereby  afforded,  nor  as  to  the 
title  of  the  Company  to  the  property  hereby  mortgaged.  The  Trustees 
shall  be  under  no  obligation  to  see  to  the  recording,  registration,  filing 
or  refiling  of  this  Indenture  or  any  instrument  of  further  assurance,  or 
to  the  giving  of  any  notice  thereof,  or  to  see  to  the  delivery  to  them  of 
personal  property  intended  to  be  mortgaged  or  pledged  hereunder,  or 
generally  to  see  that  any  of  the  property  intended  now  or  hereafter  to 
be  conveyed  in  trust  hereunder  is  subject  to  the  lien  hereof.  The  Trustees 
shall  not  be  accountable  for  the  use  of  any  bond  delivered  hereunder  or 
the  application  of  the  proceeds  of  the  same. 

The  Trustees  shall  be  under  no  duty  in  respect  to  any  tax  which 
may  be  assessed  against  them  or  against  the  owners  of  bonds  hereunder 
in  respect  to  the  property  hereby  conveyed,  nor  in  respect  to  any  other 
prior  liens,  nor  to  see  to  the  insurance  of  any  part  of  the  property 
hereby  mortgaged  or  pledged.  The  Trustees  may  select  and  employ  here¬ 
under  suitable  agents  and  attorneys,  and  for  their  acts  and  neglects,  if 
selected  with  reasonable  care,  the  Trustees  shall  be  in  no  wise  responsible. 
The  Trustees  shall  not  be  liable  for  any  error  of  judgment  or  the  exercise 


52 


of  their  discretion  hereunder;  bnt  the  Trustees  may,  in  their  discretion 
advise  with  legal  counsel  to  be  selected  and  employed  by  them  at  the 
expense  of  the  Company,  and  shall  be  fully  protected  in  any  action  under 
this  Indenture  taken  by  them  in  good  faith  in  accordance  with  the 
opinion  of  such  counsel.  Finally,  and  generally,  the  Trustees,  save  for 
their  own  wilful  default  or  gross  negligence,  shall  not  be  personally 
liable  to  anybody. 

The  Company  agrees,  from  time  to  time,  on  demand,  to  pay  to  the 
Trustees  reasonable  compensation  for  their  services,  to  reimburse  the 
Trustees  for  all  their  expenditures,  and  to  indemnify  and  save  the  Trustees 
harmless  against  any  liabilities  which  they  may  incur  in  the  exercise  and 
performance  of  their  powers  and  duties  hereunder;  and  for  such  in¬ 
demnification,  reimbursement  and  compensation  a  first  lien  is  hereby 
imposed  by  the  Company  in  favor  of  the  Trustees  upon  the  trust  estate. 

Whenever,  in  the  administration  of  the  trusts  of  this  Indenture, 
the  Trustees  shall  deem  it  necessary  or  desirable  that  any  matter  be 
proved  or  established  prior  to  the  Trustees  taking  or  suffering  any  action 
hereunder,  such  matter  (unless  other  evidence  in  respect  thereof  be  herein 
specifically  prescribed)  may  be  deemed  to  be  conclusively  proved  and 
established  by  a  certificate  signed  by  the  President  or  a  Vice-President  and 
the  Treasurer  or  Assistant  Treasurer  of  the  Company  and  delivered  to 
the  Trustees,  and  such  certificate  shall  be  full  warrant  to  the  Trustees  for 
any  action  taken  or  suffered  by  them  under  the  provisions  of  this  Inden¬ 
ture  on  the  faith  thereof;  but  in  their  discretion  the  Trustees  may  require 
such  further  or  additional  evidence  as  to  them  may  seem  reasonable; 
and  the  Trustees  shall  at  all  times  be  authorized  to  make  examination 
by  themselves  or  their  agents  of  the  affairs  of  the  Company  for  the 
purpose  of  informing  themselves  as  to  the  performance  by  the  Company 
of  all  of  its  covenants  hereunder,  or  for  the  purpose  of  advising  the  Trus¬ 
tees  as  to  the  exercise  of  any  power  hereunder,  and  the  expense  of  any 
such  examination  shall  be  born  by  the  Company. 

The  Corporate  Trustee  shall  allow  and  credit  upon  any  moneys 
which  it  may  at  any  time  receive  or  hold  under  any  of  the  provisions  of 


53 


this  Indenture  interest  at  such  rates  as  it  allows  at  the  same  time  upon 
other  deposits  of  similar  character. 

The  Trustees  may  buy,  sell  or  deal  in  the  bonds  and  coupons  secured 
hereby  as  freely  as  if  they  were  not  Trustees  hereunder,  and  no  trust 
relationship  shall  arise  hereunder  as  to  any  such  bonds  or  coupons 
which  may  be  owned  by  either  of  said  Trustees. 

Section  2.  Any  Trustee  may  resign  and  be  discharged  from  the 
trusts  created  by  this  Indenture  by  giving  to  the  Company  notice  in 
writing,  and  to  the  bondholders  notice  by  publication  of  such  resigna¬ 
tion,  specifying  a  date  when  such  resignation  shall  take  effect,  which 
notice  shall  be  published  at  least  once  a  week  for  two  successive  weeks 
prior  to  the  date  so  specified,  in  one  daily  newspaper  of  general  circula¬ 
tion  published  in  each  of  the  cities  of  Little  Rock,  Arkansas,  New  York 
and  Chicago.  Such  resignation  shall  take  effect  on  the  day  specified  in 
such  notice,  unless  previously  a  successor  trustee  shall  have  been  appointed 
by  the  bondholders  as  hereinafter  provided,  in  which  event  such  resigna¬ 
tion  shall  take  effect  immediately  on  the  appointment  of  such  successor 
trustee. 

Any  Trustee  may  be  removed  at  any  time  by  an  instrument  in 
writing,  appointing  a  successor  to  the  Trustee  so  removed,  filed  with  eacli 
of  the  Trustees  and  executed  by  the  holders  of  a  majority  in  amount  of 
the  bonds  hereby  secured  and  then  outstanding. 

Section  3.  In  case  at  any  time  the  Corporate  Trustee  shall  resign 
or  shall  be  removed  or  otherwise  shall  become  incapable  of  acting,  a  suc¬ 
cessor  may  be  appointed  by  the  holders  of  a  majority  in  amount  of  the 
said  bonds  then  outstanding,  by  an  instrument  in  writing  filed  with  the 
Trustees  and  executed  by  such  bondholders;  but  until  a  new  Corporate 
Trustee  shall  be  appointed  by  the  bondholders  as  herein  authorized,  the 
Company,  by  an  instrument  executed  by  order  of  its  Board  of  Directors, 
shall  appoint  a  Trustee  to  fill  such  vacancy.  After  any  such  appoint¬ 
ment  by  the  Company,  it  shall  cause  notice  of  such  appointment  to  be 


54 


published  once  a  week,  for  two  successive  weeks,  in  one  daily  newspaper 
of  general  circulation  published  in  each  of  the  cities  of  Little  Rock, 
Arkansas,  New  York  and  Chicago,  but  any  new  Trustee  so  appointed 
by  the  Company  shall  immediately  and  without  further  act  be  super¬ 
seded  by  a  Trustee  appointed  in  the  manner  above  provided  by  the 
holders  of  a  majority  in  amount  of  said  bonds,  whenever  such  appoint¬ 
ment  by  said  bondholders  shall  be  made. 

If  in  a  proper  case  no  appointment  of  a  successor  trustee  shall  be 
made  pursuant  to  the  foregoing  provisions  of  this  Article  within  six 
months  after  either  the  resignation  of  the  Corporate  Trustee  or  any 
successor  shall  have  taken  effect,  or  the  Corporate  Trustee  or  any  suc¬ 
cessor  shall  have  become  incapable  of  acting,  the  holder  of  any  bond 
hereby  secured  or  the  retiring  Trustee  may  apply  to  any  court  of  com¬ 
petent  jurisdiction  to  appoint  a  successor  trustee.  Said  court  may  there¬ 
upon  after  such  notice,  if  any,  as  such  court  may  deem  proper  and  pre¬ 
scribed,  appoint  a  successor  trustee. 

Any  successor  trustee  appointed  hereunder  shall  execute,  acknowl¬ 
edge  and  deliver  to  the  Company  an  instrument  accepting  such  appoint¬ 
ment  hereunder  and  thereupon  such  successor  trustee,  without  any 
further  act,  deed,  conveyance  or  transfer,  shall  become  vested  with  the 
title  to  the  mortgaged  premises,  with  all  the  rights,  powers,  trusts,  duties 
and  obligations  of  its  predecessor  in  the  trust  hereunder  with  like  effect 
as  if  originally  named  as  Trustee  herein.  Upon  request  of  such  successor 
trustee,  the  Company  and  the  Trustee  ceasing  to  act  shall  execute  and 
deliver  such  instruments  of  conveyance  and  further  assurance  and  do 
such  other  things  as  may  reasonably  be  required  for  more  fully  and  cer¬ 
tainly  vesting  and  confirming  in  such  successor  trustee  all  the  right,  title 
and  interest  of  the  Trustee  ceasing  to  act  in  and  to  the  mortgaged  prem¬ 
ises  and  property  and  such  rights,  powers,  trusts,  duties  and  obligations, 
and  the  Trustee  ceasing  to  act  shall  also,  upon  like  request,  assign  and 
deliver  to  the  successor  trustee  any  property  subject  to  the  lien  of  this 
Indenture  which  may  then  be  in  its  possession. 


55 


Every  successor  corporate  trustee  hereunder  shall  always  be  a  trust 
company  in  good  standing,  organized  under  the  laws  of  the  State  of  New 
York,  and  doing  business  in  the  City  of  New  York,  or  organized  under 
the  laws  of  Illinois  and  doing  business  in  the  City  of  Chicago,  having  a 
capital,  undivided  profits  and  surplus  aggregating  at  least  $2,000,000, 
if  there  be  such  a  trust  company  willing  and  able  to  accept  such  trust 
upon  reasonable  and  customary  terms. 

Section  12.  Frank  H.  Jones,  one  of  the  parties  of  the  second  part, 
has  been  joined  as  Individual  Trustee  hereunder,  so  that  if,  by  any  present 
or  future  law  in  any  jurisdiction  in  which  it  may  be  necessary  to  perform 
any  act  in  the  execution  of  the  trust  hereby  created,  the  Continental  and 
Commercial  Trust  and  Savings  Bank,  as  Trustee,  or  its  successor  or  suc¬ 
cessors,  may  be  incompetent  or  unqualified  to  act  as  such  Trustee,  then 
all  the  acts  required  to  be  performed  in  such  jurisdiction,  in  the  execu¬ 
tion  of  the  trusts  hereby  created,  shall  and  will  be  performed  by  said 
Frank  H.  Jones,  as  Trustee,  or  his  successor  or  successors,  acting  alone. 
Except  as  it  may  be  deemed  necessary  for  the  said  Frank  H.  Jones  solely  to 
execute  the  trusts  hereby  created,  the  Continental  and  Commercial  Trust 
and  Savings  Bank,  Trustee,  or  its  successor  or  successors  may  solely  have 
and  exercise  the  powers,  and  shall  be  solely  charged  with  the  perform¬ 
ance  of  the  duties  herein  declared  on  the  part  of  the  Trustees  to  be  had 
and  exercised  or  to  be  performed. 

Any  requests  in  writing  by  the  Continental  and  Commercial  Trust 
and  Savings  Bank,  Trustee,  or  by  any  trust  company  appointed  in  suc¬ 
cession  to  it,  to  the  Individual  Trustee  hereunder,  or  to  any  Trustee 
appointed  in  succession  to  him,  shall  be  sufficient  warrant  for  the  Indi¬ 
vidual  Trustee  or  his  successor  or  successors  in  taking  such  action  as  may 
be  requested. 

Such  Individual  Trustee  or  any  successor  or  successors  may  dele 
gate  to  the  Continental  and  Commercial  Trust  and  Savings  Bank,  Trus¬ 
tee,  or  any  Trust  Company,  appointed  in  succession  to  it,  the  exercise  of 


56 


any  power,  discretionary  or  otherwise,  conferred  by  any  provision  of  this 
indenture. 

Said  Continental  and  Commercial  Trust  and  Savings  Bank,  as  Trus¬ 
tee,  and  its  successors  from  time  to  time  in  the  trusts  hereby  created, 
shall  have  the  power  at  any  time,  by  an  instrument  in  writing,  duly  exe¬ 
cuted  by  its  President  or  Vice-President,  under  its  seal,  to  remove  said 
Frank  II.  Jones  from  his  position  as  one  of  the  Trustees  hereunder,  and 
to  appoint  some  other  officer  of  the  Trust  Company  then  acting  as  one 
of  the  Trustees  hereunder,  as  successor-in-trust  to  the  said  Frank  H. 
Jones,  and  any  successor-in-trust,  so  appointed,  in  case  of  the  removal  of 
said  Frank  H.  Jones  as  Trustee,  or  in  case  of  the  death,  resignation,  or 
inability  to  act  of  the  said  Frank  H.  Jones,  shall  be  vested  with  all  and 
singular,  the  same  power  and  authority  as  is  in  this  trust  deed  conferred 
upon  the  said  Frank  H.  Jones. 

ARTICLE  XIII. 

Miscellaneous  Provisions. 

All  the  covenants,  stipulations  and  agreements  in  this  Indenture 
contained  are  and  shall  be  for  the  sole  and  exclusive  benefit  of  the  parties 
hereto,  their  successors  and  assigns,  and  of  the  holders  of  the  bonds  and 
of  the  coupons  hereby  secured. 

Whenever  in  this  Indenture  either  of  the  parties  hereto  is  named  or 
referred  to,  it  shall  be  deemed  to  include  the  successors  and  assigns  of 
such  parties,  and  all  the  covenants,  promises  and  agreements  in  this 
Indenture  contained  by  or  on  behalf  of  the  Company,  or  by  or  on  behalf 
of  the  Trustees,  shall  bind  and  inure  to  the  benefit  of  their  respective 
successors  and  assigns,  whether  so  expressed  or  not. 

This  Indenture  may  be  simultaneously  executed  in  any  number  of 
counterparts,  and  all  said  counterparts  executed  and  delivered,  each  as 
an  original,  shall  constitute  but  one  and  the  same  instrument. 

In  witness  whereof  said  Arkansaw  Water  Company  and  said 
Continental  and  Commercial  Trust  and  Savings  Bank  have  caused 


57 


these  presents  to  be  signed  in  their  respective  corporate  names  by  their 
respective  presidents  or  vice-presidents,  and  impressed  with  their  respec¬ 
tive  corporate  seals,  attested  by  their  respective  secretaries  or  assistant 
secretaries,  and  said  Frank  H.  Jones  has  hereunto  signed  his  name 
and  affixed  his  seal,  all  as  of  the  dav  and  vear  first  above  written. 

Arkansaw  Water  Company, 

[corporate  seal.]  By  M.  F.  Riley, 

Attest:  President. 

G.  M.  Gadsby, 

Asst.  Secretary. 

Signed,  sealed  and  delivered  by 
Arkansaw  Water  Company  in 
the  presence  of 

Reuben  B.  Crispell, 

Harry  E.  Towle. 


Continental  and  Commercial  Trust  and  Savings  Bank, 
[corporate  seal.]  By  John  Jay  Abbott, 

Attest:  Vice-President. 

Frank  H.  Jones, 

Secretary. 

Signed,  sealed  and  delivered  by 
Continental  and  Commercial 
Trust  and  Savings  Bank  in  the 
presence  of 

Lewis  C.  Davis, 

Walter  E.  Toon. 

Frank  H.  Jones,  Trustee. 


Signed,  sealed  and  delivered  by 
Frank  H.  Jones  in  the 
presence  of 

Lewis  C.  Davis, 

Walter  E.  Toon. 


58 


State  of  New  York) 

County  of  New  Yorkjss' 

On  this  29th  day  of  January,  1916,  personally  appeared  before  me, 
the  undersigned,  a  Notary  Public  duly  commissioned  and  sworn  to  act 
both  for  the  County  of  New  York  and  in  said  State  aforesaid,  M.  F.  Riley, 
to  me  well  known  as  the  President  of  the  Arkansaw  Water  Company, 
and  G.  M.  Gadsby,  to  me  well  known  as  the  Assistant  Secretary  of  said 
Company,  and  they  severally  duly  acknowledged  that  they  had  in  their 
said  official  capacities  executed  the  foregoing  mortgage  or  deed  of  trust 
as  the  act  and  deed  of  said  Company,  for  the  consideration  and  purposes 
therein  mentioned;  and  the  said  M.  F.  Riley  further  acknowledged  that, 
as  President  of  said  Company,  he  executed  said  mortgage  or  deed  of  trust 
in  the  name  of  and  under  the  corporate  seal  of  said  Company,  which  is 
affixed  thereto;  and  the  said  G.  M.  Gadsby  further  acknowledged  that, 
as  Assistant  Secretary  of  said  Company,  he  duly  attested  the  corporate 
seal  of  said  Company ;  and  they  both  severally  duly  acknowledged  that  the 
said  mortgage  or  deed  of  trust  is  the  act  and  deed  of  said  Arkansaw  Water 
Company,  and  that  it  and  they  in  its  behalf  have  executed  the  same  for  the 
consideration  and  purposes  therein  mentioned  and  set  forth ;  and  I  do  so 
certify. 

Witness  my  hand  and  notarial  seal  the  day  and  year  hereinbefore 
written. 


A.  G.  Swan, 
Notarv  Public. 

t j 

Notary  Public,  Kings  County, 
Certificate  Filed  in  New  York  County  No.  216, 
New  York  County  Register  No.  6390. 


My  Commission  Expires 
March  30,  1916. 


59 


State  of  Illinois) 

County  of  Cook  )ss‘ 

On  this  31st  day  of  January,  1916,  personally  appeared  before 
me,  the  undersigned,  a  Notary  Public  duly  commissioned  and  sworn 
to  act  both  for  the  County  of  Cook  and  in  said  State  aforesaid,  John  Jay 
Abbott,  to  me  well  known  as  the  Vice  President  of  the  Continental  and 
Commercial  Trust  and  Savings  Bank,  and  Frank  H.  Jones,  to  me  well 
known  as  the  Secretary  of  said  Continental  and  Commercial  Trust  and 
Savings  Bank,  and  they  severally  duly  acknowledged  that  they  had  in 
their  said  official  capacities  executed  the  foregoing  mortgage  or  deed  of 
trust  as  the  act  and  deed  of  said  Continental  and  Commercial  Trust  and 
Savings  Bank,  for  the  consideration  and  purposes  therein  mentioned; 
and  the  said  John  Jay  Abbott  further  acknowledged  that,  as  Vice  Presi¬ 
dent  of  said  Continental  and  Commercial  Trust  and  Savings  Bank,  he 
executed  said  mortgage  or  deed  of  trust  in  the  name  of  and  under  the 
corporate  seal  of  said  Continental  and  Commercial  Trust  and  Savings 
Bank,  which  is  affixed  thereto,  and  the  said  Frank  H.  Jones  further 
acknowledged  that,  as  Secretary  of  said  Continental  and  Commercial 
Trust  and  Savings  Bank,  he  duly  attested  the  corporate  seal  of  said  Con¬ 
tinental  and  Commercial  Trust  and  Savings  Bank,  and  they  both  severally 
duly  acknowledged  that  the  said  mortgage  or  deed  of  trust  is  the  act 
and  deed  of  said  Continental  and  Commercial  Trust  and  Savings  Bank 
and  that  it  and  they  in  its  behalf  have  executed  the  same  for  the  considera¬ 
tion  and  purposes  therein  mentioned  and  set  forth ;  and  I  do  so  certify. 

Witness  my  hand  and  notarial  seal  the  day  and  year  hereinbefore 
written. 


My  Commission  Expires 
October  29,  1918. 


L.  E.  Falk, 
Notary  Public. 


60 


State  of  Illinois) 

County  of  Cook  jss' 

On  this  31st  day  of  January,  1916,  personally  appeared  before 
me,  the  undersigned,  a  Notary  Public  duly  commissioned  and  sworn 
to  act  both  for  the  County  of  Cook  and  in  said  State  aforesaid,  Frank  H. 
Jones,  to  me  well  known  as  one  of  the  parties  who  executed  the  foregoing 
mortgage  or  deed  of  trust,  and  he  duly  acknowledged  that  he  had  executed 
the  same  for  the  consideration  and  purposes  therein  mentioned  and  set 
forth ;  and  I  do  so  certify. 

Witness  my  hand  and  notarial  seal  the  day  and  year  hereinbefore 
written. 


My  Commission  Expires 
October  29,  1918. 


L.  E.  Falk, 
Notary  Public. 


B  36 


8501U 


